WTI drops below $40 on renewed concerns over demand outlook
- WTI fell sharply after closing higher in previous two days.
- Surigng number of coronavirus cases in Europe weigh on energy demand outlook.
- EIA will release its weekly Crude Oil Stocks Change data.
Crude oil prices gained more than 2% on Wednesday and closed the second straight day in the positive territory but started to fall on Thursday. As of writing, the barrel of West Texas Intermediate (WTI) was down 3% on a daily basis at $39.85.
Dismal demand outlook hurts WTI
The surging number of new coronavirus infections in Europe and new restriction measures revived concerns over an uneven recovery in the global energy demand. France announced that it will start imposing nightly curfews in major cities for four weeks and Germany said it is planning to announce new coronavirus-related restrictions. Additionally, several news outlets reported that London could go into a tier-two lockdown from Friday night.
Moreover, the lack of progress in coronavirus relief aid negotiations in the US seems to be weighing on market sentiment and making it difficult for crude oil to attract investors.
Meanwhile, the weekly data published by the American Petroleum Institue on Wednesday showed that crude oil inventories in the US declined by 5.4 million barrels in the week ending October 9th. Later in the day, the Energy Information Administration (EIA) will publish its weekly Crude Oil Stocks Change report as well.
Technical levels to watch for