Oil prices slipped on Monday despite news that OPEC was supportive of extending a six-month deal to cut output as investors continue to grapple with worries about growing U.S. oil output and high inventories.

Brent was at $51.67 a barrel, down 9 cents. U.S. West Texas Intermediate (WTI) crude futures rebounded from losses, but were down 43 cents to $48.35 a barrel

Benchmark Brent crude futures briefly surged into positive territory, but edged back down again, after sources within OPEC said, the group is considering to extend production cuts into the second half of 2017.

The brief surge repeats a pattern that has emerged in the last 10 days after a market rout that saw big speculators exit bullish positions on persistently high inventory figures. Crude has made a few attempts to rebound after a 10 percent decline a week-and-a-half ago, but the surges have generally been brief.

Analysts say speculative investors are likely to keep reducing bullish positions, thanks to optimism among U.S. producers boosting drilling activity, which in part will offset OPEC attempts at reducing supply.

Last week speculators cut more than 150,000 contracts betting on firmer U.S. and Brent oil prices, a record high.

Latest U.S. drilling data supported estimates for higher production, with 14 oil rigs added in the week to March 17 to 631, the most since September 2015, energy services company Baker Hughes Inc said on Friday.

Growing U.S. production is playing into concerns about the effectiveness of the deal between members of OPEC and other producers.

An upgrade in non-OPEC supply prospects also led analysts at J.P. Morgan to cut their 2017 and 2018 price forecasts to $55.75 and $55.50 for Brent and to $53.75 and $53.50 for WTI, respectively.

The risks that OPEC has painted itself into a corner cannot be ignored and it may need to extend, or even increase, cuts if the response from shale producers is more vigorous than current model.

In a further sign that OPEC kingpin Saudi Arabia was adhering to its output cut pledges, official data showed that its crude exports fell by about 300,000 bpd in January.



Brent Daily

Brent has been trading above daily trendline as pointed from my last analysis. If price continues to go sideways above the trendline, I'd look for selling opportunities at the break the of trendline.

brent 4hr

On 4hr, I dont see any sell setup for now. But if u are bull on Oil, price opens for the week at WM2 and there could be a short term buying opportunity towards top of the structure - (black horizontal line). My bias on oil still remain bearish, so I'd be looking to sell somewhere between WM3 and top of the structure.

WTi Daily

WTi on the other hand has somewhat different structure where it broke the daily trendlline. I'd look for selling opportunities on smaller TF

WTi 4hr

On 4hr, price is trading below daily trendline and I'd be cautious if I'm taking a buy. I dont see any immediate sell setup for the time being.

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