After a two-day rally, futures on US West Texas Intermediate Crude Oil plunged over 2% on Thursday, despite forecasts of a rebound in oil demand globally, as the COVID-19 crisis in India worsened.
The International Energy Agency (IEA) said yesterday that oil demand was already exceeding supply, while that shortfall will probably increase even if Iran bolsters exports.
That announcement came a day after the Organization of the Petroleum Exporting Countries affirmed its projection of a strong rebound in global oil demand this year, driven by growth in China and the United States.
However, concerns over health crisis in India, the third-largest oil importer worldwide, persisted. Other countries have already been alarmed about the new variant of the coronavirus, first detected in India and now spreading to other parts of the globe. Yesterday India reported more than 362 000 new infections and over 4,100 deaths, with total confirmed COVID-19 cases now exceeding 23.703 million.
“The path for crude prices appears to be higher but until the situation improves in India, WTI will probably struggle to break above the early March high,” Edward Moya, senior market analyst at OANDA, wrote in an investor note, cited by Reuters.
In other news, the southeastern United States continued facing fuel shortages, six days after the Colonial Pipeline was shut down. Yet, a large part of the fuel pipeline network will likely resume operations by the end of this week, according to experts.
As of 8:45 GMT on Thursday WTI Crude Oil Futures were retreating 2.39% to trade at $64.50 per barrel, while moving within a daily range of $64.46-$65.81 per barrel. Yesterday the commodity rose as high as $66.63, or its strongest price level since May 5th ($66.76 per barrel). WTI Crude Oil Futures have risen 1.43% so far in May, following another 7.47% surge in April.
Meanwhile, Brent Oil Futures were losing 1.84% on the day to trade at $67.75 per barrel, while moving within a daily range of $67.68-$69.02 per barrel. Yesterday Brent Oil rose as high as $69.88, or its strongest price level since May 5th ($69.92 per barrel). Brent Oil Futures have risen 1.50% so far in May, following another 5.74% surge in April.
Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures
Central Pivot – $65.89
R1 – $66.82
R2 – $67.55
R3 – $68.48
R4 – $69.40
S1 – $65.16
S2 – $64.23
S3 – $63.50
S4 – $62.76
Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures
Central Pivot – $69.03
R1 – $69.87
R2 – $70.71
R3 – $71.55
R4 – $72.38
S1 – $68.19
S2 – $67.35
S3 – $66.51
S4 – $65.66