Crude oil prices continue to drift lower on Monday, extending the decline after a rejection from highs on Friday. Brent crude dipped below the $65 figure and is now trying to cling to this level on order to trim losses. The bearish correction looks appropriate after a period of strong gains. Ahead of Christmas holidays in the Western countries, many traders decided to take profit at attractive levels.
In a wider picture, the market remains supported by trade-related optimism. By the way, Trump reiterated on Sunday that the two countries are ready to sign a phase one deal. This driver should cap the downside pressure in the market now. Apart from technical factors, the selling pressure came from Baker Hughes report which showed that the drilling activity in the Unites States increased by 18 oil rigs last week.
In the near term, Brent could continue to consolidate around the $65 handle, a break below which will shift market focus to the 100-DMA which serves as a support zone marginally above the $64 figure. Should bearish pressure persist, this level will likely cap the decline. On the upside, the immediate meaningful resistance now comes around $65.80.