WTI Crude Oil Price Hangs on to Trend Line Support Amid Growing Coronavirus Fears. Will It Hold?
WTI crude oil price opened with a weekend gap on concerns about the coronavirus outbreak. The commodity started this week’s trading 68 cents below its closing price from Friday as G20 leaders worried about the economic impact of COVID-19. The IMF warned that the coronavirus outbreak could push Chinese growth below 6% for 2020.
This is bearish for crude oil price because China has been one of the largest consumers of oil. Slower economic growth is often linked to lower demand for the commodity. However, it is worth noting that unlike other risk assets like the Aussie, losses on oil were limited.
In fact, on the 4-hour chart, we can see that the uptrend on WTI crude oil is still intact. The commodity is currently testing support on the rising trend line from connecting the higher lows of February 10, February 11, and February 18. This price, around $52.00, also coincides with the 100 SMA. Reversal candlesticks around this psychological handle could indicate that crude oil price may soon trade higher to $54.35 where it peaked last February 20. On the other hand, a drop below today’s low at $51.40 may indicate that crude oil price could soon drop to its year-to-date lows at $49.40.