Yesterday, oil prices dropped lower alongside US shares, hitting a two-month low as emerging markets related worries resurfaced in the early part of Monday’s Wall Street session. The move was quickly reversed however after reports that Saudi Arabia had reduced crude oil production in July. Looking ahead, API inventory flow statistics are in focus. If API reports a larger outflow, prices might rise. Needless to say, a lower reading may send them downwards.
Crude oil prices continue to hover at support-turned-resistance that guided the uptrend from early February. A daily close above its upper boundary at 68.40 opens the door for a retest of the 69.90-70.20 area. However the RSI looks mixed to bearish suggesting more downside pressure. A move below the swing low at 65.95 might target the 65.50 support level.
Support: 65.95 65.50
Resistance: 67.50 68.40