Oil Steady After Drop on Signs Rally Overdone
Oil steadied after its first decline in six sessions, as technical indicators suggested the recent rally may have gone too far.
West Texas Intermediate traded near $73 a barrel, after falling 0.5% on Monday, while Brent settled near $76. Futures reversed gains on Monday after a nine-day relative strength index showed prices were overbought and on a bearish move in the WTI prompt spread.
Crude may struggle to sustain gains after breaking out of a narrow range it has traded in since mid-October last week, as expectations of a supply glut, a possible revival of idle OPEC+ production and sluggish demand from top importer China weigh on market optimism. While money managers were bullish at the start of the year, analysts including Bank of America Corp. have reiterated warnings that new production from non-OPEC countries will outpace global consumption growth.
Source: Bloomberg
