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  • Production in Libya returns to ordinary levels as ports reopen.
  • Weekly API crude oil stock report is next in line.

After recording heavy losses on Monday, crude oil prices went into a consolidation phase on Tuesday with the barrel of West Texas Intermediate fluctuating in a relatively tight range near the $67 mark. As of writing, the barrel of WTI was trading at $66.75, losing 30 cents, or 0.5%, on the day.

The shift in the sentiment surrounding crude oil prices seems to be caused by the easing concerns over supply disruptions. With its eastern fields re-opening, Libya’s output is estimated to increase by 650,000 – 700,000 per day.

“Fears of shortages, which pushed prices as high as $80 per barrel in early summer, are receding and concerns about looming surpluses growing,” Carsten Menke, commodity research analyst at Swiss private bank Julius Baer, told Reuters on Tuesday.

Furthermore, a report released by the Energy Information Administration yesterday revealed that the production in the U.S. was expected to rise by 143,000 barrels per day in August to reach a record high of 7.47 million barrels. Later in the session, the API is going to publish its weekly crude oil stock report and a higher-than-expected increase in U.S. stocks could help the WTI retrace some of its recent losses.

Technical levels to consider

The initial support for the barrel of WTI aligns at $66.40 (daily low), ahead of $65.70 (Jun. 22 low) and $65 (psychological level). On the upside, short-term resistances could be seen at $67.50 (daily high), $68.70 (May 30 high) and $70 (psychological level).