Brent oil stays on the back foot on oversupply concerns

Brent oil is trading weak in Asia on heightened oversupply concerns after US crude inventory build and record high Saudi output.

At the time of writing, Brent was trading 21 cents or 0.48% lower on the day at $43.84/barrel. Prices clocked a high of $45.65 on Wednesday before falling sharply to a low of $43.79 following the US inventory data release, which showed crude inventories rose 1.1 million barrels in the week ended Aug. 5. Analysts were expecting a drawdown of 1.00 million barrels.

Bearish news did stop there as reports showed Saudi Arabia’s production in July rose to a record high of 10.67 million barrels per day.

Brent oil Technical Levels

Acceptance below $43.83 (Aug 1 low) would open doors for a drop to $42.99 (38.2% of 27.08-52.83). Further losses could run into support of 200-DMA at $41.94. On the other hand, a break above $44.17 (May 4 low) would expose 45.00 levels (zero figure). A violation there could yield $45.74 (weekly high).