WTI falls to three-week lows and bounces to the $ 39.00 zone

• WTI price falls to $ 38.35, the lowest level since early November.
• Coronavirus outbreak in the world fuels concerns about oil demand.
• The rise in the dollar adds another negative factor for crude.

The WTI (futures on NYMEX) It has seen a sharp reversal from the three-week lows of $ 38.35 and rallied to $ 39.10, cutting the losses for the day.

Despite the rebound from the lows, sentiment around oil remains undermined by resurgent concerns about oil demand as major Eurozone economies are imposing new stringent restrictions to limit the second wave of coronavirus contagion. Meanwhile, the US saw the largest single-day increase in the case on Sunday.

Another factor is that investors were concerned about the prospects for a increase in supply, especially after Libyan state giant National Oil Corp announced that production would reach one million barrels per day (bpd), as quoted by Reuters.

In addition, the generalized strength of the US dollar, due to risk aversion in the markets, further fueled the decline in the WTI barrel.

The attention now stays on the feeling in Wall Street and in the new virus data from both sides of the Atlantic. In addition, the negotiations for more stimulus in the US and for the news in the electoral campaign eight days before the presidential elections.

WTI technical levels

“Oil prices could suffer deeper losses this week. The bearish case would strengthen if prices find acceptance under the immediate support of $ 39.04 (Oct 12 low). On the other hand, the horizontal resistance at $ 41.72 is the level to beat for the bulls, ”explained FXStreet analyst Omkar Godbole.