WTI Crude Oil Price Heads to December 2018 Lows as Russia Fails to Answer Calls for Production Cuts

WTI crude oil price is heavily being sold off in today’s Asian session. After opening at 46.20, the commodity’s CFD price fell to an intraday low of 45.23 which is the lowest level we have seen since January 2019.

Most of the sell-off has been driven by dampened demand for oil. The coronavirus outbreak has led to city lockdowns, flights being cancelled, and companies preventing employees from going to offices. Today, the WHO also warned that the infection has the potential to become a pandemic with more cases outside of China rising.

It also does not help that Russia has remained mum on additional production cuts. Earlier this month, OPEC proposed to cut oil production by 600,000 barrels per day in order to support oil prices. However, Russia has not yet responded to this proposal despite making a statement earlier today. The country’s Energy Minister remarked that the impact of the coronavirus is bigger than expected but failed to comment on Russia’s decision to reduce oil production.

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WTI Crude Oil Price Outlook

On the monthly time frame of WTI crude oil price CFDs, we can see that the commodity has formed lower highs after initially making higher highs. Consequently, a head and shoulders pattern has formed. As of this writing, WTI crude oil price is testing support at the neckline around $45.40. A break of this level could trigger a sell-off on the commodity. It could soon fall to support at $30.30 where it bottomed on February 2016.

On the other hand, if support holds, we could see WTI crude oil trade higher. It could test resistance at $63.36 where it made highs on April 2019 to January 2020.

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