WTI selling stalls, but remains weak below $ 50 mark

Oil futures on NYMEX its Asian downslide and entered a phase of consolidation above $ 49.60, as focus shifts to fresh US crude supplies reports due later in the week ahead.

WTI: Dust settles over the OPEC outcome?

The US oil fell back in the red on Monday, after having staged a temporary reversal from the OPEC outcome induced 5% sell-off seen on Thursday, as Friday’s US drilling report continues to weigh on the black gold.

According to energy services firm Baker Hughes Inc, the US drillers have now added rigs for 19 straight weeks, to 722, the highest amount since April 2015 and the longest run of additions on record.

Moreover, broad based US dollar strength combined with doubts over the effectiveness of last week’s OPEC deal reached on the extension of cuts for 9 months,  also keeps oil prices undermined.

Attention now turns towards the weekly US stockpiles report from the API and EIA due for release in the week ahead. At the time of writing, WTI loses -0.20% to 49.70, while Brent is down -0.13% to $ 52.45.

WTI technical levels 

A break above $ 50/50.04 (round number/ daily top) could yield a test of $ 50.50 (psychological levels) beyond which $ 51.06 (May 21 high) could be tested. While a breach of $ 48.18 (six-day low) would expose $ 47.75 (May 15 low), below which downside opens up for a test of $ 47.35 (May 11 & 12 low).