A darker mood awaits Oil markets after WTI Crude collapsed to its lowest level since December 1998 below $11.
Over the past few months, the story defining Oil’s painful depreciation revolved around the coronavirus chaos, demand destruction and oversupply concerns. Rising fears over fuel storage facilities being overwhelmed by the excessive supply are compounding to Oil’s woes and offered investors another reason to attack the already battered commodity. With economic growth in the world’s largest energy consumer decelerating, the grim outlook for Oil is growing grimmer by the day. At this point in time, it is difficult to pinpoint a possible floor for WTI Crude and this continues to be reflected in the bearish price action.
WTI Crude has depreciated 7% today and more than 80% since the start of 2020. Prices are heavily bearish on the daily timeframe with the technical and fundamentals well aligned. Sustained weakness below $15 could open the doors towards $10 and potentially lower.
Alternatively, a breakout above $15 may trigger a technical rebound back towards $29 before bears re-enter the scene.
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