Brent futures recovered from China-led slump to hit a fresh 2016 high of $41.44/barrel on talk of major producers coming together to cut/freeze produce.
The oil price had gained around 5% on Monday after news of a meeting between Latin American oil producers led to hopes of production cuts. Markets are also speculating about a possible production freeze accord between major OPEC and non-OPEC producers.
Prices fell to a low of $40.17 after the data in China showed a sharp slowdown in imports as well as exports.
Oil traders now await US American Petroleum Institute (API) inventory data release.
Brent Technical Levels
The immediate resistance is seen at $42.19 (Aug 24 low), above which futures could test 44.01 (61.8% of Aug 31 high-Jan low). On the other hand, a break below 40.78 (50% of Aug 31 high-Jan low), would open doors for a slide to 38.96 (Jan 4 high).
(Market News Provided by FXstreet)