- WTI crude oil drops 5.76%
- Bleak manufacturing data and US/China tensions depressing prices
- Demand could increase as authorities ease lockdowns
On Monday crude oil prices dropped as concerns that the global crude oil surplus may continue even as COVID-19 lockdowns ease with new tensions between the US and China brewing regarding the source of the coronavirus.
Oil prices continue dropping even as cartel members slash production
Manufacturing data expected tonight from France, Italy, and Germany could give Brent traders an indicator of shifting the demand obliteration argument to Brent. Last week reports of reduced infection rates offered support to the oil market ahead of Russia and Saudi Arabia slashing production.
The positive sentiment shown last week was, however, undercuts following a Blomberg survey that indicated that production continued to increase in April despite major producers agreeing on cuts. Although there are indications that the drop in oil consumption is bottoming in various markets there are concerns that it will be more than a year or even longer before global demand returns to pre-COVID-19 levels.
Crude oil Analysis
As of the time of writing WTI crude oil had dropped 5.76% to around $18.64 with its daily range being from $18.05 to $19.52. In the past week, WTI oil dropped 2.04% to a low of $18.05 and a high of $20.45 while in the past month it has dropped 2.15 to a range of $18.05-20.45. In the past year, WTI oil has dropped 63.98% from highs of $65.65 to lows of $6.55.
It is important to note that oversupply in March and April will continue depressing oil prices even if consumption picks up. Also, there is growing tension between the United States and China over the origin of the coronavirus which could also dampen chances of an economic recovery globally.
Time : 04-05-2020
Pivot : 18.88
Technical View : Long above18.68
Target : 18.48, next 3 targets 18.09, 17.41 and 16.76
Comments : Weak Bearish sentiment
Last Price : 18.64.