WTI and week ahead

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Virus and Risk of Demand!

By: Ahura Chalki

Asian stocks are trading in negative zone following the failure of last weeks of the US and EU markets. Nikkie is down 2%, while Hang Seng losing 1.2% and Shangai 0.8%. US futures also trading in red, DJI and S&P losing by 0,1% and Nasdaq down by 0.4%.

Fears of the second wave of virus raising more while new record high of infected recorded in the US, Brazil ad Mexic and now eyes again turning on Asian countries, putting India in the spotlight, the country which can be hit and spread it more because of the large and poor population. The market is worry about the demand, as in a longer period still, international traveling is a dream and factories are not working with full capacity.

On the other hand, at the end of July, 9.7 production cut will be changed to 7.7, while in most countries, the oil inventories are at its highest level. Friday’s U.S. Baker Hughes Oil Rig Count reported at 188, signaling of emergency situation of the US Shale companies. Based on Reuter’s report, “Chesapeake Energy Corp (CHK.N) filed for Chapter 11 on Sunday, becoming the largest U.S. oil and gas producer to seek bankruptcy protection in recent years as it bowed to heavy debts and the impact of the coronavirus outbreak on energy markets.”

For the week ahead, the WTI market will depend on virus headlines. Asian countries now coming in the spotlight after America, as new records high of infected reporting from India, Indonesia, and the Philippines.

Technical overview – H4 Chart

RSI under 40, while the price moves under the OBV trend line and EMA crossing strategy also supporting the bears, technical indicators remain of more bearish.

Pivot point: 38.30

Resistance levels: 38.90 / 40.00

Support levels: 34.22 / 36.65

Today, the expected trading range is between 36.65 support and 38.90 resistance.


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