Global demand in free fall driving WTI Oil dynamically lower

<p><a href="https://admiralmarkets.com/analytics/traders-blog/global-market-down-oil-lower"><img data-resize="auto" data-resize="auto" data-resize="auto" data-resize="auto" style="width:auto;" data-src="https://fxmedia.s3.amazonaws.com/articles/remote/a99d8f647d6fd5559bc27621daeaae6c.jpeg" alt="Stock Market" rel=""></a> <br></p><p>
Oil prices continued to drop over the course of the last few weeks. The cause for the initial drop of over 30% on March 9, which was the sharpest drop in Oil prices since 1991, came from Saudi Arabia-led OPEC and Russia failing to agree on deeper production cuts in response to the spread of the coronavirus which has hit the global economy and its demand for oil.
</p><p>
In fact, Saudi Arabia made a very aggressive step towards a price war, by slashing official selling prices of its oil to the US, Europe and Asia by as much as $8 a barrel.
</p><p>
And given the difficulty to estimate the impact of the Coronavirus and resulting economic shutdown around the globe will have since no one really knows how long it will take, WTI Oil hasn't yet recovered from this drop, instead continuing to drop even further, currently eyeing the important mark of 20 USD/Barrel.
</p><p>
And even if WTI Oil has fallen more than 65% from its 2020 yearly highs around 65.50 USD, an even deeper drop seems very likely.
</p><h2>No demand despite massive price discounts from Saudi Arabia</h2><p>
Over the course of last week, rumours began to spread that despite the massive discounts Saudi Arabia is offering right now, European and US buyers refuse to buy oil in larger amounts.
</p><p>
The US, in particular, refusing to buy may surprise after US president Trump publicly announced the US Strategic Petroleum Reserve (SPR) to purchase oil on March 13.
</p><p>
Last Wednesday, the US announced that it cancels its plan to add to its strategic reserves after the $2 trillion stimulus package from the US showed that the requested $3 billion in funding for the project was left out.
</p><p>
Given the current uncertain economic environment and the missing demand from the US SPR, a drop below 20 USD and further bearish momentum seems only a question of time.
</p><h2>How to trade WTI Crude Oil in this environment?</h2><p>
A first target on the downside could be seen around 17.00/50 USD, below and with rising uncertainty the Coronavirus-based economic shutdown might have on the global economy, a drop as low as 10 USD into the region of the 1998/1999 lows seems possible:
</p><p>
<img data-resize="auto" src="https://fxmedia.s3.amazonaws.com/articles/remote/7fa19fe04fa507aa62d9f6fa9fcdd02e.png" alt="Daily Chart" rel="" />
</p><p>
<em>Source: Admiral Markets </em><a href="https://admiralmarkets.com/trading-platforms/metatrader-5" target="_blank">MT5</a> with <a href="https://admiralmarkets.com/trading-platforms/metatrader-se" target="_blank">MT5-SE Add-on</a> <em>WTI Daily chart (between December 21, 2018, to March 27, 2020). Accessed: March 27, 2020, at 07:30pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.</em>
</p><p>
If you plan to position yourself with the bearish momentum, you probably should go with the device "Sell the bounce" where you switch to a lower time-frame like H1, identify a sequence of falling highs and lows and position yourself after a re-test of former lows, placing your stop at the last recent relative high:
</p><p>
<img data-resize="auto" src="https://fxmedia.s3.amazonaws.com/articles/remote/ec08cdef6529916c7967717eb61195cd.png" alt="Daily chart" rel="" />
</p><p>
<em>Source: Admiral Markets MT5 with MT5-SE Add-on WTI Daily chart (between March 11, 2020, to March 31, 2020). Accessed: March 31, 2020, at 07:00 AM GMT</em>
</p><p>
In 2015, the value of WTI fell by 31.1%, in 2016, it rose by 42.8%, in 2017, it increased by 11.5%, in 2018, it fell by 24.6%, in 2019, it increased by 33.3%, meaning that after five years, it was up by 13.6%.
</p><h2>Discover the world's #1 multi-asset platform</h2><p>
Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!
</p><p>
<a href="https://admiralmarkets.com/trading-platforms/metatrader-5" target="_blank"><img data-resize="auto" alt="Download MetaTrader 5 and begin trading today!" src="https://fxmedia.s3.amazonaws.com/articles/remote/0e3744043847e7252178d09d61f0b102.png" rel="" /></a>
</p><p>
<em>Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter "Analysis") published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:</em>
</p><ol>
<li>This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.</li>
<li>Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.</li>
<li>Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter "Author") based on the Author's personal estimations.</li>
<li>To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.</li>
<li>Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.</li>
<li>The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.</li>
<li>Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.</li>
<li>The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.</li>
<li>Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the <a href="https://admiralmarkets.com/risk-disclosure" target="_blank">risks</a>.</li>
</ol>