Oil decline extends to the worst levels of the day
Talk of increasing North American oil production is the driver in the crude market to start the week.
Arab producers appear to be implementing production cuts but on Friday the weekly Baker Hughes data showed US rigs up for the 10th consecutive week.
The momentum began to build early in US trading and it has extended in the past 30 minutes as crude busted to a session low of $51.85. The stops were hit on the break of last week's lows near $52.
Technically, this $51.80-$52.00 zone is critical. It was the old resistance zone in October but now it appears as though a rough head-and-shoulders top could be in place that would target $49.
But I have to emphasize that it's rough and it will depend on holding below this $52 zone, likely through inventory data on Tues/Wed.
