WTI slumps to 7-month lows on global oversupply concerns
Crude oil prices came under a heavy selling pressure on global oversupply concerns on Tuesday, pushing the barrel of West Texas Intermediate to its lowest level since November 15 at $42.95. As of writing, the barrel of WTI is trading at $43.05, losing 3.1%, or $1.4, on the day.
In addition to continuously increasing shale production in the U.S., Libya's announcement that the country reached its highest bpd production of 2017 at 885K and is aiming to raise that number up to 1 million bpd, triggered a fresh sell-off. Furthermore, Russian Energy Minister Novak made it clear today that Russia was not planning to meet the U.S. shale oil producers to discuss the market situation.
Although a recent report by Reuters revealed that OPEC, non-OPEC compliance with the oil output curbs in May reached its highest level since the start of the supply cut deal at 106%, the bearish pressure remains stable. Later in the session API Weekly Crude Oil Stock data will be watched closely by the participants.
Technical outlook
The first support for the barrel of WTI could be seen at $42.20 (Nov. 14 low) ahead of $41.40 (Oct. 8 low) and $41 (psychological level). On the upside, resistances align at $45.00 (psychological level), $46.00 (psychological level) and $46.50 (Jun. 14 high).
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
