WTI holds above four-month low touched on Thursday, seems vulnerable to slide further

• WTI is seen consolidating the overnight sharp downfall to its lowest level since July 10.
• Worries about global demand turn out to be a key factor undermining the commodity.
• Dovish Fed expectations continue to weigh on the USD, albeit do little to lend support.

West Texas Intermediate (WTI) Crude Oil prices oscillate in a narrow trading band during the Asian session on Friday and consolidate the overnight slump to over a four-month low. The commodity currently trades just above the $73.00/barrel mark and remains on track to register losses for the fourth straight week.

The incoming softer US macro adds to worries about a deeper global economic downturn, which is expected to dent fuel demand and continue to undermine Crude Oil prices. The US monthly Retail Sales fell for the first time in seven months in October and pointed to slowing demand at the start of the fourth quarter. Adding to this, the number of Americans who filed for unemployment insurance for the first time rose to 231K during the week to November 11 from the 218K previous (revised from 217K).

This comes on top of persistent worries about a slowdown in China – the world's top oil importer – and easing fears of a supply disruption from the Middle East, validating the negative outlook for the black liquid. Meanwhile, bets that the Federal Reserve (Fed) is done with its policy-tightening campaign and might start cutting rates in the first half of 2024 keep the US Dollar (USD) bulls on the defensive. A subdued USD price action, however, does little to impress bullish traders or lend any support to Oil prices.

The commodity's inability to attract any buyers or register any meaningful recovery suggests that the bearish trend might still be far from being over. That said, technical indicators on the daily chart have moved on the verge of breaking into oversold territory, making it prudent to wait for some near-term consolidation or a modest bounce before the next leg up. Nevertheless, Oil prices seem poised to register losses of over 5% for the week.

Technical levels to watch