WTI bounces off lows, back above $53.00/bbl

• WTI rebounds from lows near $52.00 per barrel.
• OPEC+ could extend output cuts on coronavirus fears.
• API’s report on US crude supplies next on the docket.

After hitting new lows in levels last seen in early October 2019 near $52.00, prices of the WTI have managed to regains some attention and have retaken the $53.00 mark per barrel.

WTI up on OPEC+ rumours, looks to China

The massive sell-off in prices of the West Texas Intermediate appears to have met an important contention near the $52.60 region per barrel so far on Tuesday. So far, the barrel of WTI shed more than 20% since 2020 tops near the $66.00 mark recorded earlier in the month to Monday’s low near the $52.00 mark.

Prices of the commodity reversed the downside somewhat on Tuesday in response to sources indicating the probability that the OPEC+ could extend the ongoing oil output cut agreement until June or even increase the reductions, always on the back of rising fears on the impact of the Wuhan virus on the global economy.

Later in the day, the American Petroleum Institute (API) will publish its weekly report on US crude oil inventories. On Wednesday, the DoE is due to release its official report and Friday will see the report on US oil rig count by driller Baker Hughes.

What to look for around WTI

The outbreak of the Wuhan virus and its potential impact on Chinese/global growth have been heavily weighing on traders’ sentiment during the past couple of weeks, adding to the already rising concerns on the excess of crude oil supply in the markets. Supporting the later, and undermining any serious rebound, the IEA expects prices to remain capped during the first half of the year following a forecasted surplus of nearly a million bpd. On the supportive side for prices emerge the persistent supply disruptions in Libya, social unrest in Iraq and a fragile US-Iran scenario, all in combination with the increasing likeliness that the OPEC+ could extend further the oil output cuts.

WTI significant levels

At the moment the barrel of WTI is gaining 0.51% at $53.04 and faces the next resistance at $57.36 (200-day SMA) seconded by $58.59 (55-day SMA) and finally $59.73 (weekly high Jan.20). On the other hand, a breach of $52.13 (2020 low Jan.27) would aim for $51.06 (monthly low Oct.3 2019) and finally $50.47 (monthly low Aug.7 2019).