Crude oil prices edged lower on Tuesday as investors worried a rise in U.S. shale output would weaken OPEC’s efforts to cut global supplies.
U.S. crude production from major shale formations is expected to rise by 131,000 bpd in April from the previous month to all-time high 6.95 million barrels per day, the U.S. Energy Information Administration (EIA) said in a monthly report on Monday.
The quiet session comes as crude prices retreated from session highs of $61.97 a barrel which followed president Donald Trump’s decision to replace Rex Tillerson with CIA director Mike Pompeo as Secretary of State. Pompeo reportedly shares similar views on the Iran nuclear deal to Trump.
“I wanted to either break it [the Iran nuclear deal] or do something and he felt a little bit differently, so we were not really thinking the same,” Trump told reporters following his decision to oust Tillerson.
Crude Oil 4hr chart has formed "Falling wedge” pattern. The last session ended up retesting a key resistance level inside the channel holding at $61(3957). The market is expected to continue in bearish, testing all the way through $60-59(3892-3827) levels in the upcoming sessions. Alternatively, if the market breaks above the resistance level then it might turn bullish once again. The upside rally could test $62-63(4022-4087) levels. Support holds at $59(3827).
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