WTI crude is up by 2% just above $51.00 currently
Is oil going to be the comeback kid in the whole coronavirus saga? Perhaps, but I reckon it may be a bit too early to call for a significant rebound just yet.
The danger for oil yesterday came as price broke below the lows posted in June, August and October last year, with price even tracking below $50.00 to start trading today.
But as the risk mood picked up, so is oil price at the moment as we are seeing a move of more than 2% higher on the day to just above $51.00.
I would still say that oil is still in a "don't catch a falling knife" scenario and if there's one thing we learnt yesterday, it is how quickly sentiment can turn around.
Despite more positive risk developments in North American trading overnight, oil still fell heavily and that remains a risk in trading today as well.
For now, a move back above the October low @ $50.99 is encouraging but unless the coronavirus outbreak blows over soon, oil may find little reason for a massive upside relief as traders continue to grapple with the situation and how it is impacting oil demand.
And if price falls back towards the key support region around $50.52-60 and back below the $50.00 level, it could be a slippery slope towards $45.00 potentially next.
