• West Texas Intermediate oil is trading -1% at the time of writing, correcting form shake-out lows. 
• TDS analysts continue to expect follow-through selling in the complex.

The price of a barrel of oil was a lot cheaper on Thursday, as markets flipped heavily risk-off as the spread of coronavirus gripped the markets attention, popularised by the media which has little else to report on at this stage, following the recent signing of the US/Sino trade deal and an impeachment trial which markets are showing little interest in. 

At the time of writing, West Texas Intermediate oil is trading at $55.49,-1%, but well off the lowest point of the day down at $54.79 having fallen from $56.25 as the late Asia high. During the US session, there was a headline doing the rounds, quoting a statement made by the World Health Organisation indicating that it is still too early to declare coronavirus as a public health emergency. More on that here.

Energy market shake-out

Analysts at TD Securities explained that "there is perhaps no clearer sign that we are in a world awash with oil than the price action across the complex in the aftermath of the de-escalation of US-Iranian tensions, and Libyan crisis, which catalyzed a massive positioning shakeout."

The analysts continue to expect follow-through selling in the complex, as trend followers further sap liquidity from the market, selling their length and adding shorts.

"Indeed, we expect a massive selling program to take place in gasoline and WTI crude, along with moderate CTA liquidations in Brent crude, as systematic trend followers attempt to capitalize on the downtrend in the energy complex."

WTI levels