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WTI Crude futures are currently trading at $50.10-lower by 0.34% as compared to the previous closing price. The contract posted a loss of 2.45% in the last week.
Crude prices also posted their fifth consecutive weekly decline in the last week.
Brent crude futures were trading at $54.10-lower by 0.72% as compared to the previous closing price. The contract declined by about 6.3% in the last week.
Crude prices dropped today as investors assessed China’s crude demand following the China-linked virus outbreak and awaited a decision by major producers to cut supply further to balance markets.
Crude oil has fallen more than 20% from a peak in January after the fast-spreading coronavirus hit demand in China and increased tensions of excess supplies.
Concerns over output were not eased last week when Russia said it needed more time before committing to supply cuts sought by other large producers.
A technical committee has advised the OPEC+ group to lower production by a further 600,000 barrels per day.
The OPEC and its allies have been implementing supply cuts of 1.2 million bpd since January last year.
The Algerian oil minister said over the weekend the committee had advised further supply cuts until the end of the second quarter.
Oil traders were worried that the proposed cut would not be sufficient to tighten oil markets as China’s state refiners have said they would lower refining throughput by around 940,000 in February.
The U.S. CFTC said on Friday (7th February) that money managers lowered their net long U.S. crude futures and options in the week to 4th February by 55,512 contracts to 162,518.
The U.S. energy services firm Baker Hughes said in its report on Friday (7th February) that the U.S. energy firms last week increased the number of rigs looking for new oil by 1 to 676 for the week ended 7th February.
Adding to supply-side data, reports which are published by the API and the EIA every week, the API is scheduled to report U.S. crude supplies for the week ended 7th February on Tuesday. Previously, the API reported that U.S. crude supplies rose by 4.180 million barrels for the week ended January 31. The EIA will report US crude inventories for the week ended February 07 on Wednesday. Previously, the EIA reported that U.S. crude inventories advanced by 3.355 million barrels for the week ended January 31.
On the technical front, the RSI is currently at 29.77% and suggests that the market can continue trading sideways. The current price is below the MA5. The current price is below the middle line of the Bollinger bands and is heading downwards.
Overall Bias is Negative and short-term trades can be initiated with below mentioned Stop Loss and Profit targets.
Trade Suggestion-Limit Sell At 50.25 Take Profit At 49.55 Stop Loss At 50.60