WTI drops to $47 as Irma is expected to weigh on US demand

Crude oil prices came under pressure on Monday with the barrel of West Texas Intermediate dropping to a fresh 10-day low at $47 as Irma is expected to hurt the U.S. crude oil demand. As of writing, the barrel of WTI was trading at $47.10, losing 0.82% on the day.

"We believe that Irma will have a negative impact on oil demand but not on oil production or processing, The two hurricanes are expected to inflict a “bearish shock” on oil balances in September, denting global demand by 900,000 barrels per day (bpd) and supply by around 300,000 bpd," Goldman Sachs analysts told Reuters.

On the other hand, oil ministers of Saudi Arabia and the United Arab Emirates on Monday suggested that it could be possible to extend the global oil supply cut pact beyond March 2018 and added that they were satisfied with the improving fundamentals of the oil market. Despite those remarks, however, crude oil is having a difficult time making a recovery. 

In the meantime, the greenback is also gathering strength against its peers with the US Dollar Index moving closer to the 92 handle, putting an extra weight on the price of the barrel of WTI.

Technical levels to consider

A decisive break below the $47 (daily low) mark could open the door for further losses towards $45.60 (Aug. 31 low) and $45 (psychological level). On the upside, resistances could be seen at $47.95 (daily high), $49.40 (Sep. 6 high) and $50 (psychological level).