Crude oil prices failed to stage a sustainable rally on Monday as Brent attracted an aggressive profit-taking above $66.50 and now tries to cling to the $65 level as traders continue to express concerns over the slowing global growth after disappointing manufacturing PMIs in major countries.
Market participants were not inspired by OPEC decision to extend the deal by nine months, in part due to the fact that prolongation was mainly prices in already. Meanwhile, further signs of slowing global growth are fueling fears of weakening global demand for oil. The additional bearish pressure comes from the US, where shale oil producers continue to expand their activity.
Technically, Brent needs to hold above $65 in order to avoid another retreat to $64.60 and then $64.20 on the way to $64. On the upside, the immediate resistance comes around $66. Once above this barrier, the short-term downside risks will partially abate.