WTI drops 1% to $ 49 mark on rising Libyan, US output

Oil futures on NYMEX ran into resistances once again below $ 50 mark, triggering a fresh sell-off in a bid to test $ 49 threshold.

WTI eyes API inventory report

After a brief period of consolidation in early Asia, the black gold came under renewed selling pressure on concerns that rising production levels in Libya and the US may outweigh the OPEC output cut deal, which aimed to reduce the global supply glut.

Moreover, oil-price forecasts downgraded by major investment banks also continue to weigh negatively on investors’ sentiment. Further, expectations of a build in the US crude stockpiles last week also adds to the downbeat tone around the commodity. The API is due to publish the crude inventory report later on Wednesday.

At the time of writing, WTI loses -0.95% to 49.19, while Brent is down -0.91% to $ 51.78.

WTI technical levels 

A break above $ 50 (round number) 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 (May 26 low) would expose $ 47.75 (May 15 low), below which downside opens up for a test of $ 47.35 (May 11 & 12 low).