WTI trades on the back foot ahead of the API report

• Fails to benefit from broad USD weakness.
• Expectations of rising US output weigh.
• API crude inventory report eyed.

WTI (oil futures on NYMEX) is seen extending its corrective slide from more-than-two-year tops, as markets resort to profit-taking ahead of the key US API crude stockpiles report.

WTI makes lower highs on daily tops, more downside in play?

The black gold also keeps losses amid expectations of rising US shale output, in the wake of the latest comments from the IEA Executive Director Birol delivered earlier today. More so, the sentiment was also dented by the latest IEA report that showed the agency cut the global oil demand growth forecasts for 2017 and 2018 by 100k bpd.

The optimism generated on the hopes of OPEC cuts deal extension beyond March 2018 was overshadowed by worries over rising US output levels, thereby, keeping any recovery in oil prices limited. Also, markets believe that the rally to mid-2015 tops may be overdone and hence, prefer to take the profits off the table.

Attention now remains on the US API crude inventories for fresh trading impetus.  At the time of writing, WTI trades -0.25% lower at $ 56.62, while Brent steadies near $ 63.10.

WTI Technical Levels

Higher-side levels: 57.69 (Nov 7 high), $ 57.91 (multi-month highs), $ 58.50 (psychological levels).

Lower-side levels: 56.50 (key support), 56.00 (round number), 55.66 (Nov 6 low).