18 Aug 2015
WTI: weakness persists on strong global supply
FXStreet (Mumbai) - WTI oil on NYMEX prolongs its downtrend and sits near multi-year trough as its widely anticipated that global oversupply overhand may extends and the downward pressure on prices may remain intact until 2018.
WTI trades near $ 42
Currently, WTI trades -0.37% lower at 42.25, sitting at six year lows reached at 41.46 last week. Oil prices fell on Tuesday as global oversupply, a firm dollar and Iran returning to the market all contribute to the commodity's negative performance.
The US dollar index rose 0.14% to 96.97, making dollar-priced commodities such as oil more expensive in other currencies and hence less attractive to foreign investors.
Analysts at ANZ noted, "US refiners normally start to cut operations soon – with reduced refinery rates in September occurring in 9 of the past 10 years and weaker gasoline demand. The current situation suggests that we may witness increases in US crude stockpiles in coming months."
Later today, the American Petroleum Institute (API) will report its weekly data on US crude inventories; while the Energy Information Administration (EIA) is due to show its numbers on Wednesday, with markets predicting a fall of 820,000 barrels for the week to August 14.
WTI Oil Technical Levels
WTI oil has an immediate resistance which stands at 43 levels above which gains could be extended to 44.24 levels. Meanwhile, support is seen at 41.46 levels from here losses could be extended to 39 levels.
WTI trades near $ 42
Currently, WTI trades -0.37% lower at 42.25, sitting at six year lows reached at 41.46 last week. Oil prices fell on Tuesday as global oversupply, a firm dollar and Iran returning to the market all contribute to the commodity's negative performance.
The US dollar index rose 0.14% to 96.97, making dollar-priced commodities such as oil more expensive in other currencies and hence less attractive to foreign investors.
Analysts at ANZ noted, "US refiners normally start to cut operations soon – with reduced refinery rates in September occurring in 9 of the past 10 years and weaker gasoline demand. The current situation suggests that we may witness increases in US crude stockpiles in coming months."
Later today, the American Petroleum Institute (API) will report its weekly data on US crude inventories; while the Energy Information Administration (EIA) is due to show its numbers on Wednesday, with markets predicting a fall of 820,000 barrels for the week to August 14.
WTI Oil Technical Levels
WTI oil has an immediate resistance which stands at 43 levels above which gains could be extended to 44.24 levels. Meanwhile, support is seen at 41.46 levels from here losses could be extended to 39 levels.