Commodity Market: US Crude Oil falls to a fresh ten-week low as fuel demand concerns mount due to combination of factors

Futures on US West Texas Intermediate Crude Oil retreated to a fresh ten-week low on Tuesday, as fuel demand concerns mounted with US summer driving season coming to an end. Additionally, a spike in confirmed COVID-19 cases in 22 out of 50 US states during the US Labor Day weekend added to demand fears.

The majority of those 22 states with rising cases are located in the Midwest and South regions.

South Dakota reported the sharpest surge in new infections over the past two weeks, by 126%, with new cases there exceeding 3,700.

“The combination of coming out of summer peak driving season in the U.S., which is a seasonal factor, has refocused the market’s attention on whether the demand recovery is strong enough – and clearly there are some doubts, as Aramco’s price move has demonstrated,” Lachlan Shaw, head of commodity research at National Australia Bank, said.

On September 5th Saudi Aramco slashed its October official selling prices for crude oil shipments to Asia and the United States.

According to Shaw, the upcoming maintenance season for US refineries, which could lead to a reduction in crude oil demand of between 1.5 million to 2 million barrels per day, caused additional pressure on oil markets.

As of 9:03 GMT on Tuesday WTI Crude Oil Futures were retreating 3.50% to trade at $38.38 per barrel, after earlier touching an intraday low at $38.18, or a price level not seen since June 29th ($37.50). WTI Crude Futures rose 5.81% in August, while marking their fourth straight month of gains.

Brent Oil Futures were retreating 1.71% on the day to trade at $41.32 per barrel, after earlier touching an intraday low at $41.22, or a price level not seen since July 1st ($41.04). Brent Oil Futures rose 4.45% in August, while marking their fifth straight month of gains.

Daily Pivot Levels (traditional method of calculation) – WTI Crude Oil Futures

Central Pivot – $40.33
R1 – $41.31
R2 – $42.85
R3 – $43.83
R4 – $44.81

S1 – $38.79
S2 – $37.81
S3 – $36.27
S4 – $34.73

Daily Pivot Levels (traditional method of calculation) – Brent Oil Futures

Central Pivot – $42.00
R1 – $42.46
R2 – $42.88
R3 – $43.34
R4 – $43.80

S1 – $41.58
S2 – $41.12
S3 – $40.70
S4 – $40.28