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Oil falls 3% to settle under $50 for first time in 2 weeks

Oil fell below $55 a barrel on Tuesday, dropping for a third day, as concerns about the spread of the coronavirus and its impact on oil demand outweighed OPEC output cuts and Libyan supply losses.

Crude fell almost 4% on Monday, with other commodities also reporting losses while U.S. and European equities suffered their steepest declines since mid-2016 on concern the coronavirus outbreak could turn into a pandemic.

Brent crude fell $1.48 to trade at $54.86 per barrel. U.S. West Texas Intermediate crude slipped $1.53 to settle at $49.90 per barrel, its first settle under the key $50 level since Feb. 11.

“Demand concerns are wiping out all of the gains we have made over the last few weeks,” said Bob Yawger, director of energy futures at Mizuho in New York. “This is not a situation that is going to suddenly get better.”

Crude inventories are expected to rise for a fifth week running. The first of this week’s two supply reports, from the American Petroleum Institute (API)

Crude Oil Futures: Door open for extra weakness

WTI likely to breach $50.00…again

Prices of the WTI sold off on Monday amidst rising open interest and volume, hinting at the possibility that the leg lower might not be over just yet. That said, a potential break below the critical support at the $50.00 mark per barrel remains well on the cards in the short-term horizon.

According to Trading Central (3rd party RIA) the WTI could be heading DOWN to 47.00 if it does not go ABOVE 54.00

* Past performance is not a guarantee of future performance

Number of Lots:Required Margin:Risk Management (50%):Potential Profit/Loss 45.00
0.5€ 1,143.05€ 571.53€ 2,161.91
1€ 2,286.11€ 1,143.05€ 4,323.83
5€ 11,430.54€ 5,715.27€ 21,619.14
10€ 22,861.09€ 11,430.54€ 43,238.27
20€ 45,722.17€ 22,861.09€ 86,476.54

Dollar nurses losses as epidemic fuels talk of Fed rate cut

  • Against the yen, the U.S. currency traded at 110.37 yen, gaining 0.1% in Asia on Japanese buying before month-end but still almost two full yen below its 10-month high touched last Thursday.
  • The euro fetched $1.08815, extending its rebound since it hit near three-year low of $1.0778 on Thursday.

The dollar nursed losses on Wednesday as rising expectations of a U.S. rate cut and warnings from U.S. health officials about the spread of the coronavirus called into question the perceived strength of U.S. financial assets.

U.S. money market futures now fully price in a 0.25 percentage point cut by the end of June, compared to about 50% chance a week ago, although Fed officials have shied away from indicating a policy move.

Fed Vice Chair Richard Clarida said late on Tuesday the Fed is “closely monitoring” the escalating coronavirus outbreak but it is still too soon to gauge if it would require a change in monetary policy.

According to Trading Central (3rd party RIA) the USDCAD could be heading UP to 147.73 if it does not go BELOW 140.27

* Past performance is not a guarantee of future performance

Number of Lots:Required Margin:Risk Management (50%):Potential Profit/Loss 1.3385
1€ 3,066.54€ 1,533.27€ 691.90
5€ 15,332.72€ 30,665.44€ 3,459.50
10€ 30,665.44€ 61,330.88€ 6,919.00
25€ 76,663.60€ 153,327.20€ 17,297.50
50€ 153,327.20€ 306,654.40€ 34,595.00