WTI drops back towards 2-month lows, API data in focus
- Oil fails to sustain the upside on OPEC output boost headlines.
- Exposed to further downside risks on a break below $ 64.50.
WTI (oil futures on NYMEX) stalled the gradual advance seen so far this Tuesday, as sellers returned on the Bloomberg reports that the US is said to have asked the Organization of the Petroleum Exporting Countries (OPEC) to raise the oil output by 1 million barrels per day (bpd).
The minor-recovery witnessed earlier today above the $ 65 mark was mainly driven by the bulls, as they looked to correct of the three-day sell-off to two-month lows of $ 64.58 reached last US session.
Moreover, expectations of a drawdown in the US crude stockpiles also collaborated to the rebound in the barrel of WTI from multi-week lows. According to the latest Reuters poll, the US crude inventories are forecast to fall about 2.5 million barrels on average in the week ended June 1.
Looking ahead, the weekly US crude supplies report from the American Petroleum Institute (API) will offer fresh direction on the prices.
WTI Technical levels
Slobodan Drvenica at Windsor Brokers noted: “Monday’s close below 100SMA ($65.30) was a bearish signal, with the immediate focus expected to remain at the downside while 100SMA (now reverted to resistance) caps. Bearish daily techs support the notion, with a sustained break below daily cloud to generate strong bearish signal and risk extension towards $63.73 (Fibo 61.8% of $58.06/$72.89 ascend). Consolidation is expected to ideally hold below 100SMA but stronger upticks cannot be ruled out. Broken daily cloud ($66.86) is expected to cap extended upticks and keep the bearish structure intact. Res: 65.30; 66.02; 66.86; 67.44. Sup: 64.62; 63.73; 63.19; 61.92.”