WTI steps back from four-week top as coronavirus updates renew demand worries
- WTI snaps two-day winning streak.
- Headlines from Saudi Arabia, EIA data failed to sustain the upside.
- Coronavirus keeps global policymakers on the edge.
WTI declines to $53.60 during the early trading hours on Friday. The energy benchmark flashed the monthly high on Thursday but coronavirus fears fail to please the energy buyers afterward.
In addition to the increasing cases from China, the rising impact of coronavirus in other Asian nations, namely Japan, Singapore and South Korea, is also questioning the market’s future energy demand.
Even so, the Chinese Commerce Ministry stays ready to take further measures to counter the economic impact of coronavirus.
Also distantly weighing on the oil prices could be Russian refrain to be clear about future production cuts.
The US State Department recently renewed its travel warnings whereas Japanese diplomats and German Finance Ministry reports also showed concerns about the contagion’s negative impact.
In doing so, the energy benchmark ignores the weaker than expected inventory build as well as headlines from Saudi Arabia. As per Saudi state news agency, Saudi Air Defence intercepts and destroys several ballistic missiles fired from Yemen's Sanaa. On Thursday, the US Secretary of State Mike Pompeo ran a show power while touring Saudi Arabia and indirectly challenged Iran. Also supporting the energy prices were upbeat activity numbers from the US.
Looking forward, coronavirus headlines will be the key to watch for fresh direction.
Technical Analysis
The mid-month tops nearing $52.50 and February 06 high close to $52.30 are on the sellers’ radar whereas 200-bar SMA and 50% Fibonacci retracement act as the tough resistance around $54.55.