Futures on US West Texas Intermediate Crude Oil dropped for a sixth consecutive trading day on Thursday, while marking their longest streak of losses since late-February 2020, as the relentless spread of the Delta variant of the novel coronavirus worldwide bolstered concerns over fuel demand.
Additionally, an unexpected increase in US gasoline stocks last week and a firmer US Dollar mounted more pressure on the black liquid’s prices.
WTI Crude has lost over 7% and Brent Oil has retreated over 6% over the past six trading days.
Oil prices have come under pressure due to a number of factors, including slower growth in the largest oil-importing country worldwide, China, because of new COVID-19-related restrictions and some weakness in US macro data over the past week.
“Crude prices continue to look vulnerable around those mid to late summer support levels – $65 in WTI and $67 in Brent,” Craig Erlam, senior market analyst at OANDA Europe, wrote in an investor note, cited by Reuters.
“A move below $65 in WTI, for example, could see prices drop back into Q2 trading ranges between $57 and $65. This would be quite a drop from the levels we’ve seen the last couple of months,” he also noted.
A surprise US gasoline inventory build also fueled demand concerns, with gasoline demand usually peaking during the summer driving season.
The official report by the US Energy Information Administration showed yesterday that gasoline inventories had increased by 696,000 barrels to 228.2 million barrels during the week ended August 13th. In comparison, analysts on average had anticipated a drop by 1.671 million barrels.
Meanwhile, a stronger US Dollar, underpinned by expectations that the Federal Reserve may begin policy tightening this year, also pressured the dollar-priced commodity.
As of 8:31 GMT on Thursday WTI Crude Oil Futures were retreating 3.62% to trade at $62.85 per barrel, after earlier touching an intraday low at $62.77 per barrel. The latter has been the commodity’s weakest price level since May 21st ($61.56 per barrel). WTI Crude Oil Futures have retreated 14.93% so far in August, following a 0.65% gain in July.
At the same time, Brent Oil Futures were losing 1.78% on the day to trade at $66.27 per barrel, after earlier touching an intraday low at $66.02 per barrel. The latter has been the black liquid’s weakest price level since May 21st ($64.60 per barrel). Brent Oil Futures have retreated 11.73% so far in August, following a 0.70% gain in July.
Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures
Central Pivot – $65.54
R1 – $66.90
R2 – $68.60
R3 – $69.96
R4 – $71.33
S1 – $63.84
S2 – $62.48
S3 – $60.78
S4 – $59.09
Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures
Central Pivot – $68.24
R1 – $69.25
R2 – $71.02
R3 – $72.03
R4 – $73.03
S1 – $66.47
S2 – $65.46
S3 – $63.69
S4 – $61.91