WTI slumps to 2-week lows, attacks $ 48 ahead of US drilling data

Oil futures on NYMEX failed once again to hold above $ 50 mark, and from there turned south to book more-than 2% loss a day before, in response to re-emergence of oversupply concerns.

So far this Friday, the black gold extends losses and hovers near 2-week lows, as the bears remain on track to book the second straight week of losses. The commodity tests $ 48 mark, as traders continue to react negatively to the latest OPEC monthly oil market report, which showed that the cartel’s oil output rose to the highest levels since December 2016, aggravating lingering supply glut concerns. OPEC output jumped by 173,000 barrels a day to nearly 32.9 million barrels.

The rise in the OPEC’s output levels overshadowed a bigger-than-expected drawdown in US crude inventories, and hence, triggered a big sell-off in oil prices. Moreover, the commodity also remains undermined amid ongoing geopolitical tensions surrounding the US and North Korea, which continues to have negative effect on the general risk sentiment.

Meanwhile, the latest comments from the Saudi Arabian Energy Minister could offer some respite to the oil bulls. Saudi EnergyMin Al-Falih: Continuation of supply cuts is possibility

All eyes now remain on the weekly US drilling activity report due to be published by Bakers and Hughes for the next direction. At the time of writing, WTI slumps -0.66% to $ 48.25 while Brent dives -0.89% to $ 51.44.

WTI technical levels 

The resistances are aligned at $ 49.64/70 (intermittent tops), $ 50 (psychological levels), and $ 50.43 (Aug 1 high) while supports are located at $ 48.00 (round number), $ 47.44 (100-DMA), $ 46.44 (50-DMA).