Oil prices dropped on Monday morning as rising drilling activity in the United States pointed to further increases in output, raising worries about a return of oversupply.
Mondays price falls in part reversed increases last Friday, which came on the back of concerns over rising tension in the Middle East.
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.
The U.S. rig count, an early indicator of future output, is much higher than a year ago when 631 rigs were active as energy companies have continued to boost spending since mid-2016 when crude prices began recovering from a two-year crash.
Crude oil daily chart has formed "Symmetrical triangle” pattern. The last session been bullish in trend and has ended up near a key resistance level holding at $62.50(4065). The market is expected to continue in bullish momentum, once the same breaks above the key resistance. The upside rally could test all the way through $63.50-64.50(4130- 4195) levels in the upcoming sessions. Alternatively, if the resistance holds strong then the market might retest the same and turn bearish once again. The downside rally could test $61-60(3967-3902) levels. Key support holds at $60(3902).
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