WTI consolidates near 7-month lows on 62 handle

• Bears remains in control, as Tehran defies US sanctions and continues oil exports.  
• Risk-off action on the global stocks and rising supplies adds to the downside.

WTI (oil futures on NYMEX) extended its losing streak into a sixth day today and hit fresh seven-month lows near $ 62.50, now consolidating near the last amid moderate risk-aversion.

The barrel of WTI fell further on Monday after the Iranian President Rouhani said that Iran said it would ignore Washington and continue to sell. The US sanctions on the Iranian oil and banking sectors came into effect today.

The bearish pressure accelerated last week after the US granted temporary oil exemptions to eight countries under the Iran sanctions. Meanwhile, global economic slowdown concerns combined with mounting concerns over rising crude output from the world’s top 3 oil producers, Russia, the US and Saudi Arabia, also added to the weight on the commodity.

Reuters reported on Friday that Saudi Arabia pumped 10.65 million bpd in October, taking the combined output from the top three oil producers at a record 33.41 million bpd.

Furthermore, in an evidence of reduced investors’ confidence in the black gold, the latest CFTC data showed that both Brent and WTI have lost more than 15 percent in value since early October, in part as hedge funds have cut their bullish wagers on crude to a one-year low.

Looking ahead, the US mid-term election results remain the key event risk for the USD-denominated oil, as market eagerly await the US weekly fuel stocks report for some direction on the prices.

WTI Technical Levels

Resistance: 63.95/64.05 (daily high and pivot), 64.50 (psychological level), 65.13 (5-DMA).

Support: 62.50 (7-month lows/ psychological level), 61.81 (April low), 61 (round number).