WTI Crude oil is trading near $58.87, which is sharply lower from the recent high of $67.98 registered on Mar. 8. However, prices are marginally up from the recent low of $57.25.
A rally in the dollar weighed on crude prices along with global energy demand concerns. Covid infections are climbing throughout the world. New lockdown measures in India and Euro-zone countries are likely to affect energy demand negatively. Globally, the coronavirus disease has affected more than 135 million people and led to nearly 3 million deaths, as per the John Hopkins University Covid-19 tracker.
Also, Japanese Prime Minister Suga on Friday said that the government is re-imposing pandemic restrictions in Tokyo, Kyoto, and Okinawa for four weeks due to the recent surge in Covid infections.
Global economic data on Friday was negative for energy demand and crude prices. German February industrial production and French February industrial production unexpectedly fell in March which is negative for oil demand.
Positive data from India supported prices, the consumption of oil products in India rose by +17% y/y in March to 18.8 MMT, the most in 4-1/2 years, India is the third-largest consumer of crude oil.
On the inventory front, US crude oil inventories as of Apr. 2 were +3.8% above the seasonal 5-year average, gasoline inventories were -2.7% below the 5-year average, and distillate inventories were +5.1% above the 5-year average.
US crude oil production in the week ended April 2 fell -1.8% w/w to 10.9 million BPD and is down by -2.2 million BPD (-16.8%) from the Feb-2020 record-high of 13.1 million BPD.
According to the CFTC Commitments of Traders report for the week ended Apr. 6, net long for crude oil futures plunged by 19,585 contracts to 5,11,725 for the week. The speculative long position fell by 21,921 contracts, while shorts dropped by 2,336 contracts.
WTI crude oil prices are likely to face stiff resistance near 20 days EMA at $60.30, it may find a strong support near $57.40 and $55.60