Oil retreats from multi-week tops, Brent tests $ 50 mark
Oil prices on both sides of the Atlantic halted its recent run of gains and dropped Monday, mainly on the back of fresh reports of record high OPEC output as well as on profit-taking.
Oil eyes weekly supply reports
Currently, both crude benchmarks keep losses, with Brent down -0.33% at $ 50, while WTI drops -0.50% to test $ 48 barrier. The bulls take a breather after the recent upsurge, knocking-off oil in the red as oversupply worries resurface; despite last week’s OPEC oil output cut agreement.
On Friday, a Reuters survey revealed that OPEC's oil output is likely to reach 33.60 million bpd in September from a revised 33.53 million bpd in August, its highest in recent history.
Moreover, continued increase in the US rigs count data last week, also dampened the sentiment around oil markets. According to oil-field services company Baker Hughes Inc, the number of rigs drilling for oil in the US climbed by 7 in the past week to 425.
Additionally, re-emergence of Brexit fears into the markets, after British PM May said that the Article 50 will be triggered by March 2017, crushed risk appetite and weighed on the risk-assets such as oil.
Looking ahead, focus remains on the weekly crude supply reports due out from both the API and EIA later this week.
WTI Technicals:
Carol Harmer, Founder at charmertradingacademy.com, noted, “We would be looking at a correction lasting a few days to eases this overbought scenario and the downside target would then be in the 46.20/45.65 area...A move back towards this support would be good for the market and if we are to continue to trade higher we would then be in a good position to move higher and tak out the 48.65 resistance....and try and aim for the 49.95 to 50.65 area..”
“Can we take out the latter level...well we would need much effort from the buyers to be able to do this and we would then see the sellers dissolve above 51.90 as they would then be aware that we can trade higher and look to the 54.00 resistance area...”