WTI recovers toward mid-$55s after EIA reports decline in US crude oil stocks
- OPEC's Barkindo says it's too early to talk about extending output cuts.
- EIA report shows small drop in commercial crude oil inventories.
- Concerns over coronavirus becoming a global epidemic weigh on sentiment.
Crude oil prices pushed lower for the fourth straight day on Thursday with the barrel of West Texas Intermediate (WTI) slumping to its lowest level since early November at $54.75.
Fears over coronavirus becoming a global epidemic and its potential negative impact on oil demand continue to weigh on prices.
Latest on coronavirus: Beijing cancels Chinese New Year temple fairs, suspected case in Scotland.
In addition to the dismal market mood, OPEC Secretary-General Mohammad Barkindo's remarks put additional weight on the WTI's shoulders. Barkindo said that it was too early to talk about a possible extension to the OPEC+ output cut deal until the end of 2020.
EIA data helps WTI rebound
However, the weekly report published by the Energy Information Administration (EIA) revealed that commercial crude oil inventories in the US fell by 0.4 million barrels in the week ending January 17th, compared to analysts' estimate for a drop of 1 million barrels, to allow the WTI to stage a recovery. As of writing, the WTI was still down 1.17% on the day at $55.40.
On Friday, Baker Hughes Energy Services will release the US Oil Rig Count. Markets will be keeping a close eye on the developments surrounding the coronavirus as well.
Technical levels to watch for