Brent oil failed to take out $37 levels as huge build in US stocks reported by American Petroleum Institute (API) reminded markets about the excess supply issue.
Oil turns negative
Prices have turned negative as bulls failed to chew through offers around $37 levels. Markets have been speculating about the possible production freeze accord in March. Hence, prices have been on the rise for the last few sessions.
However, the API reported yesterday the inventories in the US rose by 9.9 million barrels last week, which was well above a 3.6-million barrel increase expected by analysts.
The record high inventory buildup indicates the problem of excess supply just refuses to die and that OPEC and non-OPEC producers will have to do more than just a production freeze in order to support prices.
Brent Technical Levels
Futures currently trade with moderate losses around $36.50/barrel. The immediate support is seen at 36.14 (Jan 29 high), under which prices could drop to 35.08 (Feb 23 high). On the other hand, a break above 37.00 would open doors for a rise to 38.07 (Dec 24 high).
(Market News Provided by FXstreet)
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