WTI has been consolidating the bearishness around the black gold of late with markets still unable to trust in the OPEC deal while fundamentals are diverging from sentiment.
In recent sessions, oil made new lows for the month to challenge the May lows down in the $43.50's. At the time, WTI was just one dollar away from that price on the 15th June when the greenback rallied on optimism around the Fed and US economy. The price drifted lower again today due to worries about U.S. output growth persisted. The recent U.S. oil rig count in the Baker Hughes continued for the 22nd week showing that supply is coming on-line with yet another six oil rigs that have been added.
US dollar fills opening gap, refreshes session top above 97
This is a continuation of supply that has been pressuring the price of oil for over three years and there seems to be no let-up, no matter how hard the OPEC and Russia accord tries to curb supply. This deal is currently supposed to be keeping 1.8 million barrels a day off the market, but as can be seen in the price action, oil is down 17% since the deal was struck at the end of 2016 and markets have lost faith. At this rate, oil can get to $41.00 through $43.50, $42.09 and $41.80 as support levels on the daily sticks.
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