WTI sheds 3% around $24 mark amid oversupply, second virus wave fears

• WTI bears looking to seize near-term control, eyes on $23.
• Economic re-openings optimism faded by second virus wave fears.
• USD strength, economic gloom add to the downside.

WTI (June futures on Nymex) extends its side trend into the European session, as it moves back and forth around the 24 handle.

At the press time, the US oil loses 2.95% to trade at 24.05, as the bears remain in control, with the optimism over the economic re-openings worldwide fading away.

Concerns resurface over the second wave of coronavirus, in the wake of the easing lockdown restrictions globally, and pour cold water on the expectations of global economic rebound and in turn better prospects for oil demand outlook.

Northeast China and South Korea are seeing battling a second virus wave, with Mainland China having reported 17 new cases on Monday, with new infections in Wuhan.

Adding to the bearish bias in the black gold, the haven demand for the US dollar has picked up strength across the board. The US dollar index jumps 0.34% to 100.07, reversing last week’s slump. A stronger greenback makes the USD-denominated oil expensive for foreign buyers.

Markets seem to ignore the falling output levels in Russia as virus-led demand concerns supersede and continue to dent the sentiment around the barrel of WTI. Attention now turns to the US weekly crude supplies reports due later this week for near-term trading direction on oil.

WTI technical levels to watch

The black gold currently declines towards a 100-HMA level of $23.82 ahead of visiting the triangle’s support line around $23.20. It should, however, be noted that the oil benchmark’s drop beneath $23.20 will make it vulnerable to slide towards $2050/30 support confluence including the early-May tops and 200-HMA. During the quote’s fresh move up, the triangle’s resistance line near $24.65/70 can challenge buyers before pushing them towards Wednesday’s top near $26.00,” FXStreet’s Analyst Anil Panchal noted.