WTI extends corrective slide to test $ 62.50, API data on tap

Eases-off 4-day tops on profit-taking?
Focus shifts to the US API crude stockpiles report.

Dhwani Mehta FXStreet

Having consolidated briefly near four-day tops of $ 62.87, WTI (oil futures on NYMEX) broke to the downside in the European session, as the bulls took a breather after a three-day extensive rally.

The latest leg down in the black gold can be mainly attributed to a fresh bout of profit-taking, as markets turn cautious and seek to lock in gains heading into the weekly US supplies data due to be reported by the API later on Tuesday.

Moreover, the latest IEA forecasts report also continue to dampen the sentiment around the oil markets. In its report, the IEA predicted the US shale oil output to surge over the next five years while upgrading the estimates for the US crude oil output growth through 2023.

However, the downside should remain cushioned amid the latest comments from the OPEC’s Secretary General Barkindo, delivered during the CERAWeek conference in Houston late-Monday. Barkindo called the supply cut agreement with global producers "as solid as the Rock of Gibraltar".

More so, easing concerns over the Trump tariffs induced global trade war fuelled risk-on trades, which keep the buoyant tone intact around the barrel of WTI.

All eyes now remain on the American Petroleum Institute (API) crude inventory data for further momentum on the prices.

WTI Technicals

At $ 62.51, the resistances are aligned at $ 62.87 (4-day tops), $ 63 (round numbers) and $ 63.83 (classic R2/ Fib R3). On the flipside, the supports are located at $ 62.17 (daily pivot), $ 61.86/79 (20 & 5-DMA) and $ 61.50 (psychological levels).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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