Oil off highs as supply continues to outgrow demand, WTI sees 62/barrel

Crude oil is drifting lower as production continues to outstrip demand, with WTI and Brent trading near 62.00 and 65.15, respectively.

Oil is off its recent high and declining again following a surprise boost in API Weekly Crude Stocks showed a buildup of 5.6 million barrels of crude in US refinery stores. The initial reaction was limited, but the realization that the US is still over-producing has begun to weigh on oil prices once again. 

Demand for oil is still climbing but has a long way to go before it can eat up the supply pouring out of the United States. With the US continuing to produce oil at historic levels, even the OPEC alliance is struggling to stem the tide with production cuts and banding together with non-OPEC nations to try and cut global oil supply in an attempt to reign in crude's price. With the US set to outpace the world's largest crude producer, Russia, within the next few years, OPEC is fast running out of room to maneuver as US production continues to peak.

Crude Technicals

Tuesday's decline may be setting up to price in a new lower high in crude prices, though accelerating lows are rising to form a rough triangle technical pattern, and a break of either boundary of the pattern will establish a new trend. Intraday support levels for WTI are currently at 61.15 and 60.50 with resistance at 63.10 and 63.70; Brent sees support at 63.20 and 61.80, with resistance at 67.60 and 70.00.