WTI weaker, potential test of $49.00

Crude oil prices have started the week on a negative note, now dragging the barrel of West Texas Intermediate to the proximity of the $49.00 mark.

WTI losing ground post-Baker Hughes, China

Prices for the WTI stay on the downside so far today after Chinese manufacturing PMI dropped to 51.2 during April vs. 51.6 initially forecasted and March’s 51.8, all weighing on the demand for the black gold.

Adding to crude’s downside, the greenback stays in recovery-mode, up smalls in the 99.00 neighbourhood against the backdrop of scarce volatility due to the Labor Day holiday.

Furthermore, crude oil prices remain under pressure after driller Baker Hughes reported on Friday another increase in the US oil rig count. This time, US active oil rigs increased by 9 to 697, the highest level since April 2015.

It is worth mentioning that hopes of an extension of the OPEC/non-OPEC output cut deal beyond June seems to keep pullbacks limited for the time being, with headlines on the matter staying as a source of high volatility for prices.

Looking ahead, the weekly report by the API (Tuesday) and the EIA (Wednesday) are due.

On the positioning front, WTI speculative net longs have receded to 3-week lows during the week ended on April 25, as seen in the latest CFTC report.

WTI levels to consider

At the moment the barrel of WTI is losing 0.20% at $49.20 and a surpass of $49.59 (61.8% Fibo of the March-April rally) would aim for $50.20 (high Apr.26) and finally $51.02 (20-day sma). On the downside, the immediate barrier emerges at $48.80 (low Apr.28) seconded by $48.45 (78.6% Fibo of the March-April rally) and then $48.20 (low Apr.27).