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  • Oil drops further on bearish API report and higher OPEC output.
  • The revival of the US-China trade tensions could send oil lower towards $ 67.  

WTI (oil futures on NYMEX) extends yesterday’s slide and hit fresh six-day lows just below the $ 68 handle, as the bears tighten their grip amid mounting worries over global crude supplies

WTI: Focus on EIA crude stockpiles data

The barrel of WTI remains under heavy selling pressure amid gloomy fundamentals, as the oversupply concerns returned to markets, with the unexpected build in the US weekly stockpiles and higher OPEC production levels.

According to the latest American Petroleum Institute (API) data, the US crude inventories rose by 5.6 million barrels last week against an expected decrease of 2.8 million. Meanwhile, the latest reports showed that the OPEC production rose, led by Saudi Arabia, reached a 2018 high in July.

Further, broad-based US dollar strength amid escalating US-China trade dispute also collaborate to the downbeat tone around the black gold.                    

 Markets look forward to the official US government numbers on the crude supplies, which will be published by the Energy Information Administration (EIA) later today at 1430 GMT.

WTI Technical Levels

According to Denis Joeli Fatiaki, Chief Market Analyst  at Leo Prime, “Crude WTI failed to maintain above 69.20 as indicated in yesterday’s update and fell below the price channel but managed to rebound at its 500 EMA and 67.72 support as indicated on the four hours price  chart. Crude WTI/USD will need to maintain activities above this level to head back up into the price channel. If it fails to hold above the current support at 67.72 then it could trigger a selloff to around 66.93 – 66.24.”