FXEMPIRE
All
Ad
Advertisement
Advertisement
James Hyerczyk
Add to Bookmarks
Crude Oil

U.S. West Texas Intermediate crude oil futures are trading sharply lower shortly before the regular session on Monday. The catalyst behind the selling pressure is demand destruction due to the coronavirus pandemic.

Prices for the nearby May futures contract tanked 20% to $13.99 per barrel, its lowest level since mid-March 1999. Besides the plunge in demand, prices are cratering due to the impending expiration of the May contract, set to happen on Tuesday, according to Refinitiv.

Advertisement
Know where WTI Crude Oil is headed? Take advantage now with 

Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

At 09:38 GMT, June WTI crude oil is trading $23.12, down $1.91 or -7.63%.

Traders said the major catalysts behind the weakness are a collapse in demand, a steep fall in the nearby futures contract and the lack of storage.

Daily June WTI Crude Oil

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through $21.64 will reaffirm the downtrend. The main trend will change to up on a move through the last swing top at $33.15.

The short-term range is $21.64 to $33.15. Its retracement zone at $26.04 to $27.40 is resistance.

Advertisement

Daily Swing Chart Technical Forecast

Spot prices are particularly weak at the moment, which could eventually drag the June WTI crude oil futures contract to $12-$13 per barrel. Traders should pay close attention to where the May contract goes off the board this week because this is where the June contract could go if there is no major change in the fundamentals.

Under normal trading conditions, the spread between the spot price (May futures) and the one month forward futures contact (June futures) is usually under $1.00 per barrel. At this time, the spread is about $10.00. This indicates that prices are likely to remain under pressure for at least another month.

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker