Futures on US West Texas Intermediate Crude Oil managed to recover from yesterday’s three-week lows on Friday, but a second wave of COVID-19 infections across the globe is already posing a threat to oil demand.
Yesterday WTI Crude Futures plunged 2.4% in response to a record drop in US Gross Domestic Product in Q2. A preliminary report showed that the US economy had contracted at an annualized rate of 32.9% during the second quarter, or at the steepest rate since comparable series began in 1947.
As new confirmed COVID-19 cases continue to surge across the United States and elsewhere, macroeconomic outlook has dampened due to risks of re-imposition of restrictive measures that could hamper any rebound in fuel demand.
“The equilibrium price may be lower,” Michael McCarthy, chief strategist at CMC Markets, said. “Now that we have dealt with the issues around the OPEC+ grouping, we know what’s happening there, the key issue for oil markets is demand destruction.”
OPEC+ intends to bolster global oil production from August 1st, while adding some 1.5 million barrels per day to supply.
As of 9:06 GMT on Friday WTI Crude Oil Futures were retreating 0.37% to trade at $40.17 per barrel, while moving within a daily range of $39.99-$40.53. WTI Crude Futures have slumped 2.79% so far this week, but are still poised to register their third straight month of gains.
Brent Oil Futures were gaining 0.51% on the day to trade at $43.50 per barrel, while moving within a daily range of $43.04-$43.78. Brent Oil Futures have risen 0.42% so far this week and are set to register their fourth consecutive month of advance in July.
Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures
Central Pivot – $40.15
R1 – $41.55
R2 – $42.79
R3 – $44.19
R4 – $45.60
S1 – $38.91
S2 – $37.51
S3 – $36.27
S4 – $35.04
Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures
Central Pivot – $42.84
R1 – $44.26
R2 – $45.25
R3 – $46.67
R4 – $48.10
S1 – $41.85
S2 – $40.43
S3 – $39.44
S4 – $38.46