Note

WTI drops to two-month low near $39.00 after Saudi Arabia’s price cut

· Views 404
  • WTI prints a four-day losing streak while attacking the lowest levels since July 10.
  • Saudi Aramco cut Arab Light to Asia to a discount against the benchmark for the first time since June.
  • Trading sentiment stays sluggish amid the virus woes, Sino-American tussle and the US dollar strength.
  • US holiday will curb the market moves, China Trade Balance may entertain intraday traders.

Having closed below 100-day EMA for the first time since May 29 on Friday, WTI extends losses to $39.00, intraday low of $38.80, during the early Monday’s trading. While the coronavirus (COVID-19) woes and the US-China tussle question the energy demand, Saudi Arabia’s oil price cut offered additional strength to the commodity bears.

Saudi Arabia, Russia cite COVID-19 fears…

Bloomberg came out with the news suggesting Saudi Arabia’s price cut while citing the virus woes. “The kingdom’s state producer, Saudi Aramco, reduced its key Arab Light grade of crude by a larger-than-expected amount for shipments to Asia, its main market. It also lowered pricing for U.S. buyers. Aramco cut Arab Light to Asia to a discount against the benchmark oil price used by the Saudis for the first time since June. It’s the second consecutive month of reductions for barrels to the region and the first month in six that U.S. refiners will see a cut. Aramco will trim pricing, too, for lighter barrels to northwest Europe and the Mediterranean region,” said the news.

Elsewhere, Russian energy minister Alexander Novak also said, on Friday, that the reduction of the oil demand for 2020 is expected to stand around 9-10 million barrels per day (BPD).

It’s worth mentioning that the US moves to punish Chinese technologies and diplomats via various sanctions have repeatedly irritated Beijing. Recently, Global Times used harsh words to defy the Trump administrations’ blacklisting of SMIC.

Even so, the US dollar remains on the front foot while extending the pullback from a 28-month low. The greenback seems to cheer the recent recovery in the American statistics and hopes of breaking the stimulus deadlock.

While the aforementioned catalysts can keep exerting downside pressure on oil prices, Labor Day Holiday in American may restrict the market moves. However, China’s August month trade numbers may offer intermediate trading opportunities to the market players.

Technical analysis

With a clear break below 100-day EMA, currently around $39.73, oil prices are vulnerable to further downside towards the June 25 low of $37.17.

Additional important levels

Overview
Today last price 38.99
Today Daily Change -0.72
Today Daily Change % -1.81%
Today daily open 39.71
Trends
Daily SMA20 42.53
Daily SMA50 41.55
Daily SMA100 36.15
Daily SMA200 41.87
Levels
Previous Daily High 42.08
Previous Daily Low 39.61
Previous Weekly High 43.7
Previous Weekly Low 39.61
Previous Monthly High 43.86
Previous Monthly Low 39.75
Daily Fibonacci 38.2% 40.55
Daily Fibonacci 61.8% 41.13
Daily Pivot Point S1 38.85
Daily Pivot Point S2 37.99
Daily Pivot Point S3 36.38
Daily Pivot Point R1 41.32
Daily Pivot Point R2 42.93
Daily Pivot Point R3 43.79

Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.

FOLLOWME Trading Community Website: https://www.followme.com

If you like, reward to support.
avatar

Hot

Asian shares started Monday on the backfoot as investors grapple with sky-high valuations against the backdrop of a global economy in the grip of a deep coronavirus-induced recession while OIL prices dropped sharply...

-THE END-