A ROLLERCOASTER WEEK FOR THE CRUDE OIL MARKET

Oil prices started this week controlled by the bulls in a positive note, being able to test 41.61$ per barrel recording a fresh high for the month, only to finally drop after the risk sentiment saw a late knockdown in Asia and increase in new cases in the United States of America, as market hefts in an incoming fresh virus update.

However, the WTI benchmark was able to "U" turns yesterday from 37.17$ low and claim back almost 6% of lost ground in the pullback. From a broader look, the market will continue to trade sideways, containing prices by technicalities. From the fundamental point of view, there is no sign of bullishness but the opposite. This week an increase in the inventories reported by EIA, newly infected citizens reported in different states in North America, the second wave in Asia and critical situation in Latin America, will continue to shadow the crude oil demand.

Technical reading in the intraday charts at the H4 realm, price held its grounds right above the golden Fibonacci level 6.18, saved by the critical support zone follow by the confluence of a demand zone and descending trendline, as the last line of defense to avoiding the re-test of the 34$ handle. MACD is still showing some uptrend preference and is about to form a golden cross for bullish confirmation with RSI hovering in nobody's land.

Oil prices edged higher in a volatile session on Thursday, finding some support after declining earlier, attaining support from signs of a minimal improvement in the US economy, but rising cases of COVID-19 in some states capped these gains. The same day the US Department of Commerce said in its advance estimate exports of industrial supplies, which include crude oil and petroleum products, dropped by 11.8 percent month on month in May to US$29.9 billion.

Now in the far east, according to Reuter, China is set to import 0.8-1.3 Mb/d less in August and September than it did in May. Higher oil prices, higher inventories, and worries about the second wave of coronavirus infections discourage purchases from Chinese refiners.

Indisputably, the Coronavirus will continue to damper the world economy, where central banks have unleashed trillions of dollars in stimulus while investors are still waiting for any confirmation from OPEC+ and further plan to cut production beyond July. With a grey horizon for the black commodity, see you all next week.

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