FXStreet (Mumbai) – Mounting worries over China’s economic outlook and persisting global oversupply glut drives the US benchmark, WTI on Nymex to post an eight straight weekly fall, marking the longest weekly losing streak since 1986.
WTI bleeds to multi-year lows
Currently, WTI trades -4% lower at 38.81, having reached fresh multi-year lows reached at $ 38.60 earlier this session. Oil prices face two big risks recently which hammer the black gold to multi-year trough.
The global supply glut will worsen in the months ahead as Iran plans to fully return to the oil market once economic sanctions against the country are lifted. However, the exact timing and the amount of oil it will pump still remain uncertain.
Another factor is China – its economy has been showing signs of a slowdown that was confirmed on Friday when the country’s manufacturing index posted its lowest figure in 77 months in August.
In addition, China’s Commerce Ministry said on Wednesday we might see another drop in the country’s exports in the future, after recording a 8.3% tumble in July. While worries over the recent stock market rout in China is also weighing negatively on oil prices. China is a key oil consumer.
WTI Oil Technical Levels
WTI oil has an immediate resistance which stands at 40.14 levels above which gains could be extended to 41.50 levels. Meanwhile, support is seen at 38.60 levels from here losses could be extended to 37 levels.
(Market News Provided by FXstreet)