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WTI crude prices fell on Monday as increased drilling in the United States pointed to more output, raising concerns about a return of oversupply.
U.S. West Texas Intermediate (WTI) crude futures were at $62.02 a barrel at 0350 GMT, down 32 cents, or 0.5 percent, from their previous close.
Brent crude futures were at $65.85 per barrel, down 36 cents, or 0.5 percent.
Monday’s prices slip in part reversed increases last Friday, which came on concerns over tensions in the Middle East.
On a simple supply versus demand basis, however, oil markets are facing the possibility of a renewed glut after being in a slight deficit for much of last year.
U.S. drillers added four oil rigs in the week to March 16, bringing the total count to 800, the weekly Baker Hughes drilling report said on Friday.
“Surging U.S. production will hamper exponential growth in crude oil prices,” Singapore-based brokerage Phillip Futures said on Monday.
The International Energy Agency said last week that Venezuela, where an economic crisis has cut oil production by almost half since early 2005 to well below 2 million bpd, was “clearly vulnerable to an accelerated decline”, and that such a disruption could tip global markets into deficit despite soaring U.S. output.
“We remain bearish on the future direction of its (Venezuela’s) oil sector, with production … averaging 1.535 million bpd, down 379,000 bpd on average over the year,” BMI Research said.
On the technical charts, WTI crude is trading sideways above all the moving averages (9 day, 20 day, 50 day, 100 day, and 200 day). The RSI 51.54 and the MACD is above the signal line.
Sell stop at 62.07, Take profit at 61.77, stop loss at 62.20