- WTI prices extend the decline to the $ 38.00 area.
- Traders remain concerned about the impact of the pandemic on oil demand.
- Weekly API and EIA reports on crude oil supplies are next on the agenda.
US benchmark barrel prices for light sweet crude they are on the defensive at the beginning of the week around the $ 38.50 / 40 zone.
WTI weakened by demand and supply concerns
WTI prices lost more ground on Monday in response to rising coronavirus cases in the United States and Europe, where several countries have already implemented new restrictions.
Additional pressure on oil prices comes from rising gasoline stocks in the US and Europe, which also indicates weak demand. This scenario is exactly the opposite in Asia, where demand for fuel continues to rise, as well as jet fuel.
Adding more fuel to the fire, but from the supply side, Libya continues to increase its crude oil production and exports after the country recently lifted force majeure in the Sharara and El-Feel oil fields.
On the bright side (if any), OPEC + has yet to decide whether to postpone its planned increase in oil production as early as early 2021.
As is customary on the oil agenda, the API and the EIA will release their weekly reports on US crude inventories on Tuesday and Wednesday, respectively.
Technical levels
Right now, a barrel of WTI is down 2.98% to $ 38.55 and a breakout of $ 37.54 (200-day SMA) would expose $ 36.66 (October 2 monthly low) and then $ 36.15 (September 8 monthly low). On the other hand, the next barrier is located at $ 41.87 (monthly maximum of October 20) 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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