Commodity Market: US Crude Oil extends losses due to virus spread concerns, US Dollar firms

Futures on US West Texas Intermediate Crude Oil retreated for a fourth straight trading day on Thursday with more countries imposing restrictions on movement amid continuing increase in new COVID-19 cases and a firmer US Dollar.

Japan was due to expand emergency restrictions to more prefectures on Thursday, while China imposed restrictions in some cities and cancelled flights, raising fuel demand concerns.

“China is now facing its most challenging COVID-19 crisis since the initial outbreak was brought under control,” analysts at FGE wrote in an investor note.

“The COVID-19 resurgence and the reimposition of restrictions will have negative repercussions on domestic transport fuel demand in the near term,” they added.

FGE now forecasts that gasoline demand will average almost 80,000 barrels-per-day less in August compared to July.

An unexpected increase of 3.6 million barrels in US crude oil inventories last week was another factor to mount selling pressure on the commodity.

Additionally, a stronger US Dollar, supported by expectations the Federal Reserve may begin policy tightening sooner than initially expected, also pressured the black liquid.

Still, oil price declines were restrained by tensions in the Middle East. Israeli aircraft delivered a strike on rocket launch sites in south Lebanon earlier today in response to an attack on a tanker off the coast of Oman last week that led to the death of two crew members. Israel blamed the attack on Iran, while the Islamic country denied any involvement.

As of 8:00 GMT on Thursday WTI Crude Oil Futures were inching down 0.07% to trade at $68.10 per barrel, after earlier touching an intraday low at $67.61 per barrel. The latter has been the commodity’s weakest price level since July 21st ($66.44 per barrel). WTI Crude Oil Futures have retreated 7.76% so far in August, following a 0.65% gain in July.

At the same time, Brent Oil Futures were inching down 0.06% on the day to trade at $70.24 per barrel, after earlier touching an intraday low at $69.77 per barrel. The latter has been the black liquid’s weakest price level since July 21st ($68.66 per barrel). Brent Oil Futures have retreated 6.71% so far in August, following a 0.70% gain in July.

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

Central Pivot – $68.94
R1 – $70.02
R2 – $71.90
R3 – $72.98
R4 – $74.07

S1 – $67.06
S2 – $65.98
S3 – $64.10
S4 – $62.23

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

Central Pivot – $71.07
R1 – $72.01
R2 – $73.73
R3 – $74.67
R4 – $75.60

S1 – $69.35
S2 – $68.41
S3 – $66.69
S4 – $64.96