WTI drops to 2-day lows near $ 39.40 ahead of EIA report

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  • WTI prices fell below $ 40.00.
  • The API reported an unexpected drop of 5.4 million on Wednesday.
  • The weekly EIA report appears next on the economic agenda.

Crude oil prices erase the recent advance to highs beyond the $ 41.00 per barrel mark and fall to 2-day lows in the region of $ 39.40 on Thursday.

WTI offered before EIA report

After two consecutive daily gains, US benchmark prices for a barrel of light sweet crude were subdued on Thursday despite the API reporting an unexpected 5.4 million barrel draw late Wednesday. However, the significant drop in supplies is considered short-lived, as it was a direct consequence of Hurricane Delta, according to oil analysts.

Meanwhile, the rapid spread of the coronavirus pandemic in the Old Continent, together with countries implementing new restriction measures, generated new concerns about demand, hence the downward pressure on prices.

Later, the EIA will report on US crude oil stocks later in the American session, while driller Baker Hughes will release its weekly oil rig count on Friday.

Technical levels

At the moment, the WTI barrel is down 3.98% to $ 39.43 and a breakout of $ 39.07 (Oct. 12 weekly low) would target $ 38.17 (200-day SMA) and then $ 36.66 (Oct. 2 monthly low). On the positive side, the next hurdle is located at $ 41.46 (weekly maximum of September 18), seconded by $ 43.75 (monthly maximum of August 26) and finally $ 48.64 (monthly maximum of March 3).

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Credits: Forex Street

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