WTI drops over -1% in Europe as rising output weighs

Oil futures on NYMEX extended its consolidative mode near 9-week tops into a fourth day on Monday, having faced stiff resistances near $ 49.70 levels on several occasions.

Over the last hour, the black gold came under aggressive selling pressure, after the European traders looked past the US jobs & rigs data-led renewed optimism, as concerns over rising production levels across the globe continue to haunt the markets.

However, further losses appear capped as the sentiment could remain buoyed by bullish US drilling activity report, which showed that the US drillers cut one oil rig in the week to Aug. 4, bringing the total count down to 765.

Also, the ongoing corrective mode in the US dollar against its main competitors could also lend some support to the USD-sensitive oil. A weaker US dollar makes the USD-denominated commodity less expensive for the holders in foreign currencies and vice-versa.

Focus now remains on the weekly US supplies data due out on Tuesday and Wednesday for fresh direction. At the time of writing, WTI skids -1.13% to $ 49.01 while Brent drops -1.24% to $ 51.83.

WTI technical levels 

The resistances are aligned at $ 49.64/70 (intermittent tops), $ 50 (psychological levels), and $ 50.43 (Aug 1 high) while supports are located at $ 48.11/48 (20-DMA/    round number), $ 47.60 (100-DMA), $ 46.19 (50-DMA).