Slumping Oil Sees Enduring Downtrend on Sluggish Demand

WikiFX News (14 Sept) - Lately, oil prices suffered a sharp loss on the sluggish demand, shrinking to $36.12 for a high above $43.0 and refreshing the three-month low.

According to the latest figures, both API and EIA inventories have swelled with the latter up to 500.4 million barrels. In addition, the total oil rigs in the U.S. have decreased to 180 and the demand for crude oil has entered a phase of slowing growth, said Baker Hughes, a U.S. energy services firm.

The monthly reports of OPEC and the IEA will be released today and tomorrow, respectively, while the oil market will keep eye on this Thursday's OPEC and non-OPEC Ministerial Meeting. Recent signals of adding output sent by Saudi Arabia and Russia have curbed further cuts in production. The meeting is expected to focus on member states' implementation of production cuts, which can hardly lift oil prices.

According to the daily chart, oil prices are supported around $36.50 and may see a rebound in the short term, whereas the downtrend seems to be enduring in the medium and long term. A breach below $36.0 is waiting ahead if oil prices again achieve a rally but hampered by the resistance of $38.50-39.0.

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Chart: Price Trend of WTI Oil