West Texas Intermediate oil slips on surge in COVID-19 infections, and U.S. and China tension

July 14, 2020 - 3 weeks ago
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West Texas Intermediate (WTI), the benchmark for New York-traded oil slipped in the overnight’s session on expectations that OPEC+ will start winding down production cuts next month, also escalating tension between Washington and Beijing is continuing to aggravate sentiment.

WTI oil prices slipped nearly -1% on Monday after global coronavirus cases rose by a record daily amount, increasing tensions of renewed government lockdowns, meanwhile, on growing U.S. and China tension linger.

California took a U-turn overnight after Governor Gavin Newsom ordered state-wide closure of all indoor operations at restaurants, bars, movie theatres, zoos, and museums.

The World Health Organization reported more than 230,000 new cases of coronavirus on Sunday, a one-day record.

China announced sanctions against the United States on Monday after Washington penalized senior Chinese officials over the treatment of Uighur Muslims.

An Organization of the Petroleum Exporting Countries monitoring committee will meet on Tuesday and Wednesday and is expected to recommend levels for future supply cuts.

OPEC and allies, including Russia, are expected to ease production cuts to 7.7 million barrels per day, down from a record cut of 9.7 million bpd for May through June, as global oil demand has recovered.

From the technical standpoint, due to the continuous retreats from the near-term resistance cap at $41.00-50 keeps the overall attention to the support region at $36.00-45, with the $34.00-15 to $30.00 level seen beneath.

However, due to the lack of pullbacks, a close above $41.50 (New York) could initially put $46.00 on the radar for the bulls.

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