Oil finds temporary support around $41.00 mark

A renewed buying interest around the greenback is adding on to selling pressure around WTI crude oil, which remained highly suppressed during July on renewed worries of a global supply glut.

On Monday, the black gold initially attempted to build on to its Friday's recovery from multi-month lows, triggered by a broad based selling pressure around the greenback led by weaker US GDP reading for the second-quarter of 2016. Stronger-than-expected Chinese PMI release also prompted some buying interest around the commodity and boosted it to session high level of $41.86.

The bounce-back, however, turned out to be short-lived and the commodity resumed with its near-term bearish trend to erase all of its early gains and dipped back below $41.00 handle before retracing a bit to currently trade around $41.15-20 region.

Last week's US crude oil inventory data added on the ongoing concerns of global oversupply and weighed heavily on the commodity, recording a loss of around 15% during the month of July.

Going forward, a slew of major economic releases, scheduled at the beginning of a new month, would now drive sentiment around riskier assets. This, accompanied with the release of fresh stockpiles data, promises a yet another week of volatile move in oil prices. Highlight from Monday’s economic calendar would be US ISM manufacturing PMI data, slated for release during NA trading session. 

Levels to watch

On the downside, 200-day SMA support near $40.15-10 region (nearing $40.00 psychological mark) would be key support to defend, below which the commodity seems all set to extend its slide further in the near-term. On the upside, only a strong recovery momentum above $42.00 round figure mark seems to assist it to trim some of its recent losses and lift the commodity immediately towards $42.90-43.00 horizontal resistance.