WTI: Depressed below $24.00 as traders fail to cheer hopes for production cut
- WTI fails to keep buyers hopeful as fears of coronavirus outbreak renew.
- China’s Caixin Services PMI came in positive, US President Donald Trump reiterated hopes for Saudi-Russian pact for an oil production cut.
- US economic docket, virus news will be the key for near-term direction.
WTI extends the early-day pullback from the two-week top while declining to $23.75, down 1.85%, ahead of the European session open on Friday. The oil traders fail to cheer the US President Donald Trump’s ‘hope’ for production cut as coronavirus crisis continues to hit the trade sentiment.
While reiterating his Thursday’s market-moving tweet, US President Donald Trump said that he hopes Russia, Saudi Arabia will reach a deal to cut production by as many as 15 million barrels per day (bpd) soon. However, markets were more concerned about the fresh fears of coronavirus resurgence risk as indicated by the Communist Party Secretary of China's Wuhan.
Also questioning the risk-tone was Washington’s extended lockdown as well as Asian Development Bank’s (ADB) cut to China’s 2020 GDP forecast.
In doing so, the traders ignored China’s March month Caixin Services PMI that followed the footsteps of recent activity data while rising beyond 26.5 to 43.
The US 10-year Treasury yields buck the previous day’s recovery, down four basis points (bps) to 0.59% while stocks in Asia also flash negative signals.
Oil traders may now keep eyes on the US President’s meeting with the key oil company leaders as well as the economic calendar that carries US ISM Non-Manufacturing PMI, NFP and Baker Huges Oil Rig Counts.
Technical analysis
Sellers may keep eyes on $20.00 on the radar unless breaking $28.00 mark, which nears March 19/20 high.