Shale boom deters oil bulls Crude oil prices are trying to regain the bullish momentum after yesterday’s dip below the $65 mark. However, Brent lacks the impetus as the threat of US shale production prevents the asset from a steady rebound above the 20-DMA above the key local level mentioned above. As long as the asset remains below this area, the downside risks prevail.
The market participants refrain from buying crude oil futures amid risks from the US. The concerns increased following a new report by the Energy Information Administration on Monday. The agency expects that shale output at seven major oil and gas plays in the country will climb by 131,000 barrels per day next month and will hit a 6.954 million bpd.
In the short term, Brent will likely further struggle to break above the $65 mark. By the way, the longer prices remain below this area, the more likely the asset is to fall the victim of stronger bearish risks. Another negative trigger may come from today’s API report on crude oil inventories. Should the release reflect another increase in US stocks, the downside pressure will intensify. In this scenario, the barrel could retest the $64 support, where dip demand may follow.
