China’s coronavirus crisis weighs on WTI price, on speculations of lower demand. (Pivot Orderbook analysis)

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• China’s coronavirus crisis weighs on WTI price, on speculations of lower demand.
• The Eurozone threatening to impose a cap on Rusian and a buoyant US Dollar keeps WTI defensive.
• WTI Price Analysis: A daily close below $80.00 could pave the way for a YTD low re-test.

The pair currently trades last at 77.76.

The previous day high was 78.23 while the previous day low was 76.94. The daily 38.2% Fib levels comes at 77.74, expected to provide support. Similarly, the daily 61.8% fib level is at 77.43, expected to provide support.

Western Texas Intermediate (WTI), the US crude oil benchmark, remains moderately negative due to low demand concerns surrounding the crude oil market. Factors like ongoing China’s Covid-19 outbreak and reports emerging during the week for increased crude output keep the WTI price stable. At the time of writing, WTI exchanges hands around $77.46 PB

Investors’ sentiment is mixed, in part spurred by thin liquidity conditions amid a shortened week due to the US Thanksgiving holiday. Additionally, China’s registering high number of Covid-19 cases would dent demand for the black gold, weighed on WTI price.

Newswires reported that cases peaked around 31,987 on Thursday, up from Wednesday’s 29,754. At the beginning of the week, Chinese authorities revealed measures to relax Covid-19, aiming to be less restrictive. Still, officials in some cities are again reimposing stricter measures and ordering lockdowns as they scramble to suppress the virus.

Aside from this, reports that the European Union continues its discussions to impose a price cap to Russian oil, between $65 to $70 per barrel, depressed oil prices.

Additionally, the US Dollar (USD) appreciated Friday as some short covering speculation surrounded the market. The US Dollar Index (DXY), a gauge of the greenback’s value against a basket of six peers, climbs 0.36%, up at 106.000.

After reaching a weekly high of $82.35 PB on Tuesday, WTI prolonged its losses throughout the week. Of note, WTI falling below $80.00 PB opened the door for further downside and might test the November 21 low of $75.30 if some fundamental reasons increased uncertainty about oil demand. Notably, the Relative Strength Index (RSI) continues to fall further, meaning that sellers are gathering momentum.

Therefore, WTI’s path of least resistance is downwards. WTI’s first support would be $77.00. Break below will expose the November 21 low of $75.30, which, once cleared, could send the WTI price tumbling toward its YTD low of $74.30.

Technical Levels: Supports and Resistances

XTIUSD currently trading at 77.76 at the time of writing. Pair opened at 78.17 and is trading with a change of -0.52 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 85.11, 50 SMA 84.76, 100 SMA @ 88.27 and 200 SMA @ 97.05.

The previous day high was 78.23 while the previous day low was 76.94. The daily 38.2% Fib levels comes at 77.74, expected to provide support. Similarly, the daily 61.8% fib level is at 77.43, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 77.33, 76.49, 76.03
• Pivot resistance is noted at 78.62, 79.07, 79.92

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