WTI Price Declines Below $53.00

January 28, GKFX – Prices of the barrel of West Texas Intermediate have started the week on a negative mood, breaking below the $53.00 mark although still within the multi-session consolidative theme.

WTI weaker on slowdown concerns, data

Prices of the barrel of the American benchmark for the sweet light crude oil are losing further ground at the beginning of the week, as concerns over a global slowdown appear to have returned to the markets.

Prospects of a slowdown in the global economy are reinforced by the sharp drop in the Baltic Dry index – which gauges the costs of shipping raw materials – of around 48% since the summer 2018.

Additionally, rising US oil output and the recent uptick in the US oil-rig count continues to hurt the sentiment and adds to the ongoing concerns.

Looking ahead, all eyes will be upon the US-China trade talks, which are set to resume on Wednesday and Thursday in Washington. Furthermore, the API and the EIA will publish their report on US supplies on Tuesday and Wednesday, respectively.

What to expect next?

The ongoing OPEC+ agreement to curb oil output remains the almost exclusive source of support for prices. Also sustaining higher prices, supply concerns in Libya and Venezuela are set to persist for the time being, while current US sanctions limiting Iranian oil exports also collaborate with the better sentiment.

However, this bullish view is somewhat offset by the above mentioned possibility of a global slowdown, uncertainty around the US-China trade war and oversupply concerns in response to rising US oil production.

WTI price forecast

At the moment the barrel of WTI is losing 1.66% at $52.42 and a break below $51.27 (55-day SMA) would aim for $50.67 (55-day SMA) and then $50.34 (low Jan.14). On the flip side, the next up barrier lines up at $54.22 (2019 high Jan.21) would aim for $54.48 (monthly high Dec.4) and finally $58.00 (high Nov.18 2018).


This article was written by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.

If such information is acted upon by you, then this should be solely at your discretion, and GKFX will not be held accountable in any way.

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