Oil price slumps on rising fears over fuel demand on China virus spreading
US CRUDE OIL
WTI oil price slumped to eleven-week low on Thursday, extending steep fall into fourth straight day, after coming under increased pressure on rising concerns that spreading virus in China may have stronger impact on demand.
Fears that oil prices might be shocked if epidemic develops, accompanied sufficient supply and rising crude stocks are strong negative factors for oil price.
Firmly bearish daily technical studies add to negative outlook as today’s fresh acceleration lower broke below two important supports at $56.46/16 (Fibo 61.8% of $50.91/$65.43 / base of thick rising daily cloud), close below which would generate strong bearish signals.
Bears now eye Fibo support at $54.34 (76.4%), loss of which might open way towards key levels at $50 zone.
Weekly crude inventories report (EIA) is due in a while with forecast for 1 mln bls draw, which may obstruct bears on stronger than expected drop in crude stocks.
Otherwise, oil price may remain in a free fall if crude inventories report disappoints.
Also, comments from Saudi energy minister that all options on OPEC+ meeting remain open, including further output reduction, had so far no impact on oil prices.
Res: 56.16; 56.46; 57.20; 57.94
Sup: 54.34; 53.75; 52.44; 50.91