WTI looks vulnerable below $ 63, eyes on US NFP, drilling data

• Bears guarding $ 64 barrier, as rising global supplies continue to weigh.
• US rigs count and payrolls data to offer respite to the oil bulls?

WTI (oil futures on NYMEX) is back into the red zone and looks set to test the 63 handle, as the sentiment remains dampened by mounting concerns over rising crude output from the world’s top 3 oil producers – Russia, the US and Saudi Arabia.

According to Reuters, 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. More so, the ongoing increase in the US stockpiles also added to the rising supply concerns. The latest US EIA data showed that the US crude oil inventories climbed for a sixth straight week last week.

Furthermore, downward pressure on oil can be also attributed to the bearish outlook by the US investment banking giant, Goldman Sachs, as it cited in a recent client note that Brent is expected to fall to $65 a barrel by end-2019, largely due to “the unleashing of Permian (U.S. shale) supply growth once new pipelines come online.”

Meanwhile, the earlier bounce in the barrel of WTI was mainly driven by a boost in the risk sentiment, triggered by the optimism over the US-China trade deal and the US oil waivers from Iran sanctions. Trump is said to ask his Cabinet to draft a possible China trade deal – Bloomberg

The focus now remains on the US jobs report for fresh impetus on the USD-sensitive commodity ahead of the US rigs count data release.

WTI Technical Levels

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

Support: 63.16 (6-month low), 62.50 (psychological level), 61.81 (April low).