WTI extends the correction from 2019 tops ahead of API data

• Rising US supplies and growth worries offset US-China trade optimism, OPEC cuts.  
• 56.80/57.00 is best levels to beat for the bulls for further upside momentum.

WTI (oil futures on NYMEX) eased-off fresh 2019 highs at 56.77 and entered a phase of consolidation last hours, as the bulls now await the outcome from the US-China trade talks and the US weekly crude supplies report for the next leg higher.

The black gold erased early gains and turned into the red zone, as oversupply concerns returned to markets amid rising US crude output levels. According to the latest EIA report, the US crude output by more than 2 million bpd in 2018 to a record 11.9 million bpd.

Meanwhile, a renewed bid picked-up by the US dollar versus its major rivals also added to the latest decline in the barrel of WTI while markets resort to profit-taking after the prices ran into the stiff resistance near 56.80 levels once again.

Oil prices bounced in early Asia and refreshed fresh 2019 highs at 56.77 amid a better risk sentiment on hopes that the US and China will reach a resolution on the trade spat. Moreover, expectations of tighter oil markets led by the OPEC output cuts also continued to underpin the sentiment around the commodity.

Next of relevance for the oil markets now remain the US weekly crude supplies data due on the cards later today at 2130 GMT as markets await fresh developments from the US-Sino trade negotiations.

WTI Technical Levels