WTI challenges lows around $44.00/bbl

Crude oil prices are prolonging the correction lower on Monday, with the West Texas Intermediate now testing the area below the key $44.00 mark per barrel.

WTI weaker post-data

Prices for the WTI remain under pressure at the beginning of the week as traders continue to gauge the prospects of rising US oil production against the ability of the OPEC deal to re-balance the oil markets.

Supply glut concerns have re-emerged today after driller Baker Hughes reported on Friday that US oil rig count went up by 7 to 763 active oil rigs in the week ended on July 7. It is worth mentioning that oil rig count dropped by 2 during the previous week for the first time since January, although recent data suggest that the decrease appears to be a ‘one-off’ event.

Looking ahead, the usual report on inventories by the API (Tuesday) and the EIA (Wednesday) should keep traders vigilant.

From the speculative community, oil net longs reached 3-week tops during the week ended on July 3, as per the latest CFTC report.

Further news today cited Russian FinMin A.Sulianov suggesting that $60.00/bbl could be a ceiling for the oil recovery (Brent, of course).

WTI levels to consider

At the moment the barrel of WTI is losing 0.32% at $44.09 and a break below $43.66 (low Jul.10) would aim for $42.05 (2017 low Jun.21) and finally $41.10 (low Aug.11 2016). On the upside, the initial hurdle aligns at $45.85 (38.2% Fibo of the May-June decline) followed by $46.96 (55-day sma) and then $47.31 (high Jul.4).