WTI dips below $66 ahead of API data

• IEA’s Birol urges producers to bring in more supply to the market.
• Concerns over global economic growth continue to weigh on commodities.
• Coming up: API’s weekly crude oil stock report.

Following the recovery witnessed in the second half of the previous week, crude oil prices started the week on a weak note and extended their decline on Tuesday with the barrel of West Texas Intermediate touching its lowest level since August 20 at $65.33. As of writing, the barrel of WTI was trading at $65.80, losing 1.35%, or 95 cents, on a daily basis.

Earlier in the day,  International Energy Agency Executive Director Fatih Birol argued that oil demand growth was still significant and urged producers to bring in more supply into the market. “Given oil demand growth, output cuts may not be the right step,” Birol added.  

Despite these comments, however, today’s data from the euro area showed a slowdown in GDP growth in the third quarter to revive concerns over the potential negative impact of global economic outlook on oil demand. Additionally, the dismal performance of global equity indexes continues to suggest that investors stay away from risk-carrying assets.

Later in the day, the American Petroleum Institue will publish its weekly stock report, which showed an increase of 9.8 million barrels last week. Another buildup in crude oil inventories could make it difficult for crude oil to recover its losses.

Technical levels to consider

The initial support could be seen at $65.30 (daily low) ahead of $64.40 (Aug. 16 low) and $63.60 (Jun. 18 low). On the upside, resistances align at $67.20 (daily high), $68 (Oct 29/26 high) and $69.60 (Oct. 23 high).