Commodity Market: Crude Oil plummets to two-week lows as new confirmed COVID-19 cases heighten demand recovery concerns

Futures on US West Texas Intermediate Crude Oil extended losses from last week on Monday, as new COVID-19 infection cases in China and the United States raised concerns over demand recovery.

Over the past weekend, four new cases of COVID-19 illness were reported in Beijing, all related with the city’s largest food wholesale market, which fueled concerns over a second wave of coronavirus infections after the government recently eased restrictive measures.

At the same time, on Saturday the United States reported more than 25,000 new confirmed cases, as several states, including Alabama, Texas, Arkansas, North Carolina, Florida and California, registered a record number of new COVID-19 infections per day and a record number of hospitalizations.

“The recovery in oil demand is already set to be a lengthy process, and a fresh wave of cases will certainly raise worries that a recovery in demand may take even longer than initially thought,” ING Economics pointed out in an investor note.

As of GMT 8:36 GMT on Monday, WTI Crude Oil Futures were retreating 2.59% to trade at $35.55 per barrel, after sliding to as low as $34.34, or a price level not seen since June 1st ($34.30). Last week US Oil lost 6.57%, while snapping a six-week streak of gains.

Brent Oil Futures were losing 1.23% on the day to trade at $38.46 per barrel, after earlier falling to $37.26, or a level not far from Friday’s two-week low. Last week Brent tumbled 6.98%, while marking its worst performance since the business week ended on April 24th.

Meanwhile, a monitoring panel led by OPEC will hold talks on Thursday over ongoing record supply reductions and will conclude whether oil-producing countries have made their contribution to overall cuts. The OPEC and its allies have been decreasing oil output by some 9.7 million barrels per day, while reductions are to be extended until the end of next month.

Daily Pivot Levels (traditional method of calculation) – Crude Oil

Central Pivot – $35.99
R1 – $37.46
R2 – $38.41
R3 – $39.88
R4 – $41.34

S1 – $35.04
S2 – $33.57
S3 – $32.62
S4 – $31.66

Daily Pivot Levels (traditional method of calculation) – Brent Oil

Central Pivot – $38.46
R1 – $39.90
R2 – $40.85
R3 – $42.29
R4 – $43.72

S1 – $37.51
S2 – $36.07
S3 – $35.12
S4 – $34.16