WTI struggles around $ 61.00 level as two-day selloff is sparked by rising US supplies and covid concerns
- WTI bounces off lows but still not out of danger.
- Fears around Covid, increased Iranian oil exports and increased US supplies weigh on the price of oil.
- The rebound in the US dollar also adds to the bearish sentiment around WTI.
The WTI (futures on NYMEX) remains under pressure around the $ 61.00 level, looking to extend losses for the third day in a row amid a host of negative fundamentals.
For starters, the main reason for the recent drop in oil prices is the increase in covid cases in Asiaespecially in India and Japan, which rekindles tensions over global economic recovery and fuel demand outlook.
The next catalyst is the unexpected build-up in US crude stocks last week. Data from the Energy Information Administration (EIA) released Wednesday showed that stocks of commercial crude rose by 600,000 barrels to 493.02 million barrels in the week ending April 16 versus expectations of a 4.4 million barrel drop.
What’s more, a widespread rally in the US dollar amid mixed market sentiment it also dragged down the price of a barrel WTI sensitive to the USD. By last, Iran’s high exports add to negative weight on black gold.
According to Petro-Logistics, Iranian oil exports remain high, with a total of around 500,000 bpd so far in April. The country’s oil exports may not return to 2020 lows as talks continue on reviving the nuclear deal, the Geneva-based oil supply, shipping and logistics data provider said.
Looking ahead, investors in WTI oil will continue to keep an eye out for new updates on covid, US dollar price action, and Wall Street sentiment, in order to find short-term opportunities.
WTI technical levels