- WTI looks to recapture the $42 mark.
- US stimulus and covid-led growth concerns weigh on oil.
- Focus remains on the covid and stimulus updates.
WTI (futures on NYMEX) is looking to regain the $42 level, recovering from Thursday’s temporary reversal from multi-day highs of $42.68.
Despite the renewed uptick, the bulls are finding it difficult to extend control amid a lack of appetite for riskier assets, in the face of looming risks of the coronavirus escalation on the global economic recovery and rolling back of the Fed’s crisis response.
The renewed hopes of the resumption of the US fiscal stimulus talks were washed away by the US Treasury Secretary Steven Mnuchin’s call to cut off the Fed’s emergency funding program. The program was launched in March to help steer the economy from the pandemic blow.
Dwindling global economic recovery will likely weigh on the prospect of oil demand, keeping the bearish pressures intact on the black gold. Further, rising US crude supplies also dampen the sentiment around oil.
Adding to the pessimism around the WTI barrel, Wood Mackenzie reported that US oil storage is once again approaching capacity. Inventories at Cushing are just over 80% of capacity, with oil demand recovery in doubts amid renewed lockdowns in major world economies.
However, the buyers remain hopeful ahead of the OPEC and its allies (OPEC+) meeting scheduled on November 30 and December 1. The alliance is expected to discuss the output policy once again after delaying the oil production hike by three months at its meeting last week.
WTI technical levels
“WTI Crude best support at 4120/4085. Try longs with stops below 4060. A break lower targets 4010/00 then meets a buying opportunity at 3955/35, with stops below 3900. A break lower again sees 3935/55 working as resistance to target 3890/80, probably as far as 3845/35. Minor resistance at 4160/70 but above 4200 look for yesterday's high at 4240/45 then a retest of minor resistance at last week's high at 4290/4305,” Jason Sen at DayTradeIdeas noted.
WTI additional levels
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