​Greater Market Risks May Hamper Oil Prices

WikiFX News (12 Dec.) - WTI crude once jumped to as high as $45.92 this week but stopped just shy of $46.0 with a consolidation around $45.47. Oil prices may fund pressure from recent uncertainties.

Despite this weeks hopes for a US fiscal stimulus bill, the ongoing negotiation keeps investors prudent and holds the crude market underwhelmed.

Besides, the US API reported that all the crude oil, gasoline, and refined oil inventories increased more than market expectations. Further evidence about the positive dynamic may weigh on oil prices.

With Christmas drawing near, more countries will adopt lockdowns amid the worsening pandemic in the US and Europe. EIA reduced its estimate for global oil demand in 2020 and 2021, according to the Short-Term Energy Outlook released this week, again thrusting the worries about oil demand ahead of the market.

The weak oil may test the support in the downside area of $43.60-44.0 in the short term. A breach below $43.30 may pave the way for a more drastic correction, putting $41.30 or even $39.0 on the radar.

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Chart: Trend of Oil Prices