The market took a hit from a series of dismal economic data from the US, which spurred concerns over the outlook for global oil demand amid the rising risk of a recession. In this context, the US service PMI due later today will be in the spotlight, with another disappointing figure could prompt another sell-off in risky assets including oil .
Meanwhile, the EIA report showed that US crude oil stockpiles increased by 3.1 million barrels last week, which added to the negative sentiment in the market after the report pointed to a decline in inventories by nearly 6 million barrels.
Technically, Brent needs to get back above the $60 handle in order to stage a more robust recovery. However, at this stage, the downside risks prevail, with the prices could challenge the $57 level in the short term. Once below this handle, Brent could target the lows just below $56.