Oil prices dropped for a sixth day on Friday after Iran announced plans to increase production and U.S. crude output hit record highs, adding to worries about a rise in global supplies.
The falls come amid a crush in global share markets as inflation worries grip investors. Both contracts have fallen more than 9 percent from this years high point in late January.
"Bets on further rising oil and metals prices, for example by hedge funds, have climbed to excessively bullish levels," said Carsten Menke, commodities research analyst at Swiss Bank Julius Baer. He said "We see oil prices dropping towards and below $60 per barrel."
OPEC member Iran on Thursday announced plans to increase production within the next four years by at least 700,000 barrels a day.
The U.S. Energy Information Administration (EIA) this week said crude production last week rose to a record high of 10.25 million barrels per day (bpd)
The Baker Huges Rig count is due to be released later on today.
Crude Oil daily chart has formed "Rising wedge” pattern. The last session seems strongly bearish in trend as the prices have broken out the channel’s support slope line. The market is expected to continue in the same trend, testing all the way through $60-58(3866-3738) levels in the upcoming weeks. Alternatively, if the market breaks above the previous support which is now resistance level, then it might turn bullish once again. The upside rally could test $63-64(4060-4124) levels. Previous support become resistance at $62(3995) and additional support at $58(3738).
Research Report call:
Crude oil Sell below 3890-3900 Target 3870-3860 Stop loss at 3915