WTI retreats, feels the heat of easing Chinese demand

After a brief phase of bullish consolidation seen in the Asian session, oil futures on NYMEX finally broke to the downside in early Europe, as the European traders hit their desks and react negatively to the reports of easing demand for oil from the world second biggest oil consumer, China.

According to the latest China customs data, the Chinese crude oil imports eased in April from a record high set the previous month. China's crude oil imports ease in April from record level - RTRS

Oil prices staged a solid reversal from half-yearly lows last week on increased hopes that the OPEC production cut deal will be extended beyond June, when the cartel meets later this month.

The black gold extended its upbeat momentum into early Asian trades this Monday, bolstered by latest comments from the Saudi Arabian energy minister Al-Falih. Al-Falih noted: "Based on consultations that I've had with participating members, I am confident the agreement will be extended into the second half of the year."

Focus now shifts towards the weekly crude supplies report the US due tomorrow and on Wednesday for fresh take on the US supply-side scenario.

WTI technical levels 

A break above $ 46.98/47 (daily high/ round number) could yield a test of $ 47.75 (May 4 high) beyond which $ 48.50 (psychological levels) could be tested. While a breach of $ 46.15 (classic S2/ Fib S3) would expose $ 45.29 (May 4 low), below which downside opens up for a test of $ 45 (zero figure).