WTI in a phase of consolidation near 5-week lows

• Manages to hold the $ 61 mark.
• Upward revision to 2018 oil output forecasts weigh.
• North Sea outage and Chinese oil demand cap losses.

WTI (oil futures on NYMEX) is seen moving back and forth in a tight range so far this Thursday, as the bears consolidate the recent sell-off to fresh five-week lows of $ 61.26.

The sentiment around the black gold was hit after the US EIA data showed a 1.9 million barrels buildup in the crude stockpiles in the week to Feb 2, to 420.25 mn barrels, which added to the bearish EIA report released earlier this week.

In its latest report, the EIA made upward revisions to the 2018 oil output forecasts to 10.59 million bpd, up by 320,000 bpd from its last forecast just a week earlier. With the output levels forecasted at 10.59 mn bpd, the US surpasses Saudi Arabia’s oil production levels and will undermine the efforts made by the OPEC and Russia to support the prices.

However, the barrel of WTI continues to find support from the latest reports of the second North Sea outage on the UK’s 450,000 bpd Forties pipeline network. Further, the latest China Customs data showing record Chinese crude imports last month also offers some respite to the bulls.

Looking ahead, markets await the US rigs count data due tomorrow from fresh momentum on the prices. At the time of writing, WTI trades -0.35% weaker near $ 61.58 while Brent eases -0.20% to $ 65.35.

WTI Technical Levels

The resistances are aligned at $61.93 (50-DMA) ahead of $62.37 (daily pivot) and $63.00 (round figure). On the downside, supports are located at $ 61.26 (5-week low), $60.56 (classic S1/ Fib S2) and $60.00 (key psychological support).