WTI off 3-year tops, down to test $ 64 mark
- Will it hold $ 64?
- Higher US and Canadian rigs count numbers weigh.
- US weekly crude supplies report in focus.
WTI (oil futures on NYMEX) failed once again to test multi-year tops of $ 64.75 and drifted lower on Monday, reflecting a softer start to a brand new week.
WTI looks to test 5-DMA at 64.03
The barrel of WTI is seen extending its corrective slide from near three-year tops, as markets fret over a rise in the US and Canadian drilling activity that points to higher future output in North America (NA).
For the week ended Jan 12, the energy service firm Baker & Hughes showed an addition of 10 oil rigs, taking the number higher to 752 while the Canadian energy firms almost doubled the number of rigs drilling for oil last week to 185, the highest level in 10 months, Reuters reports.
Fresh concerns over rising NA rising output negate the impact of the OPEC and Russian oil output cuts extension, as oversupply worries continue to remain a drag on the oil markets.
However, broad-based US dollar weakness combined with rising investors’ confidence in the black gold keep the sentiment buoyant around the USD-sensitive commodity. According to the US CFTC COT report released last Friday, the net bullish positions in the US crude futures positions have risen for the week ended Jan 12.
Attention now turns towards the US crude inventories reports due later this week for fresh incentives. At the time of writing, WTI drops -0.22% to $64.16 while Brent slips -0.33% to $69.61.
WTI Technical Levels
The resistances are aligned at 64.75 (3-year highs) ahead of $ $65 (round number) and $ 65.50 (psychological levels). On the downside, supports are located at $64.03 (5-DMA), $63.50 (psychological levels) and $63 (10-DMA).