WTI tumbles to 7-week lows, approaches $57.00

• The barrel of WTI breaks below the $58.00 mark.
• Oversupply concerns offset Libyan disruptions.
• API’s weekly report coming up next.

Crude oil prices have accelerated the weekly downside to fresh lows in the $57.30 region, levels last seen in early December.

WTI focused on oversupply, data

Prices of the West Texas Intermediate are trading on the back foot for the third consecutive session on Wednesday, coming under heavy downside pressure soon after recording weekly tops just below the key $60.00 mark per barrel (Monday). So far, prices have reached the 78.6% Fibo retracement of the December rally in the $57.60 region.

In fact, crude oil prices remain under pressure as oversupply concerns continue to weigh on traders’ sentiment. Indeed, these concerns continue to overshadow supply disruptions in Libya, which amount to nearly a million bpd following the closure of the country’s main oilfields, export terminals and several ports.

Furthermore, these oversupply jitters have been somehow confirmed by IEA’s Birol at the WEF in Davos on Tuesday, where he remarked the ‘abundance of energy supply of oil and gas’.

Other driver weighing on sentiment around crude oil comes from the recent virus outbreak in China and its potential impact on the economic growth.

Later in the NA session, the API will publish its weekly report on US crude oil supplies ahead of Thursday’s DoE report.

WTI significant levels

At the moment the barrel of WTI is retreating 2.04% at $57.06 and a break below $55.31 (monthly low Dec.31) would aim for $54.77 (low Nov.20 2019) and then $53.66 (low Oct.31 2019). On the flip side, the next resistance aligns at $58.83 (55-day SMA) seconded by $59.73 (weekly high Jan.20) and finally $60.53 (50% Fibo of the December-January rally).