Traders shifted to profit taking after an impressive rally. The correction was extended after Saudi Arabia reassured markets of output restoration by the end of September. Besides, the downside pressure came after the Energy Information Administration reported a crude oil inventory build of 1.1 million barrel after a nearly 6.9-million-barrel draw a week earlier.
In general, developments in the Middle East remain in market focus, with traders continue to assess the Saudi Arabia’s capabilities of restoring its oil production. In the weeks to come, the news from the kingdom will set the direction for Brent, but also market participants will closely monitor the signals from the US-China trade front. Any sign of progress in negotiations towards a deal will support demand for oil .
Technically, Brent needs to get out of the current range in order to decide on a clearer direction, with the immediate support comes around $63 while a break above $65 will improve the near term technical picture.