WTI on the offers around $ 51.50 on rising OPEC output

WTI (US oil futures on NYMEX) fell back into the red zone on Monday, after a temporary reversal seen on Friday, as the sentiment remains weighed down by the latest reports of a rise in the OPEC output levels and bearish US drilling activity report. 

The black gold kicked-off a brand new week on the back foot as supply glut fears resurfaced, after a Reuters survey found that the OPEC oil production rose by 50k bpd in Sept.

Meanwhile, the US drillers added six oil rigs in the week to Sept. 29, bringing the total count up to 750. This data from Bakers and Hughes Oil Fields Services Company also collaborated to the weakness seen around the commodity.

Further, persisting broad based US dollar demand combined with reduced appetite for risky assets, in the wake of the Spanish election fallout, also weighs down on the higher-yielding oil.

However, the losses remain capped on the back of optimistic US CFTC data and steadying output levels in Russia.

WTI: Bullish bets up for the second straight week

Russia’s Novak: Russia’s oil output levels steady in September

Attention now shifts towards the US weekly supplies report for fresh trading impetus. At the time of writing, WTI drops -0.23% to $ 51.55, while Brent slides -0.42% to test $ 56.50 levels.

WTI technical levels 

Jeffrey Halley at OANDA ASIA-PACIFIC, noted: “WTI spot is trading at 51.35 this morning, just above its ascending support line at 51.10. It has held all pullbacks throughout the September rally, and a break now could signal a deeper correction to 50.30 and then 49.00. Resistance appears above at 52.50 before its long-term resistance region between 53.50 and 54.50.”