Oil on the back foot, rally losing momentum?

• Oil benchmarks suffer a moderate drop in Asia.
• Technical charts signal short-term trend reversal/correction ahead.

Oil prices are losing altitude in Asia.

As of writing, Brent oil is at $62.93 levels, down 23 cents or 0.38 percent on the day. WTI oil is at $56.60; down 14 cents or 0.15 percent.

The bull market, which began in June ran out of steam last week due to overbought technical conditions and rising US oil output.  Traders told Reuters that they are cautious about betting on further price increases. No wonder, oil prices are looking heavy as seen on the 1-hour intraday WTI chart below-

Still, the downside could be limited due to the possibility of an extension of the global output cut deal beyond March 2018. Also, OPEC raised its oil demand forecast to 33.42 million barrels per day (bpd) from the previous forecast of 360,000 bpd. It is the fourth consecutive monthly increase in the outlook since July.