WTI in the red below $ 63.50 ahead of API data

• Down almost $ 1.5 from 3-year tops.
• Rally overdone?
• API crude inventory data in focus.

WTI (oil futures on NYMEX) extends its retreat from multi-year tops into a second day today, as markets resort to repositioning ahead of key US weekly supplies data release.

WTI breaches 10-DMA support at $ 63.43

The barrel of WTI reversed early recovery gains and fell back in the red zone, in the wake of broad-based US dollar rebound while markets sold-off the commodity, thinking that the recent rally is being overdone.

Moreover, the latest remarks from the US EIA, stating that it expected the country’s oil output to rise in February, with production from shale rising by 111,000 barrels per day (bpd) to 6.55 million bpd, also added to the weight on the black gold.

Despite the recent weakness, the sentiment around oil prices remains buoyed amid expectations of tighter markets in 2018, falling US crude inventories and the OPEC oil output cuts extension.

The focus shifts towards the US crude inventories reports due to be reported by the API later on Wednesday for fresh impetus.  At the time of writing, WTI drops -0.50% to $63.38 while Brent slips -0.57% to $68.67.

WTI Technical Levels

The resistances are aligned at $64 (key support-turned-resistance) ahead of $64.50 (psychological levels) and 64.89 (3-year highs). On the downside, supports are located at $63 (round figure), $62.64 (classic S2/ Fib S3) and $61.92 (20-DMA).