WTI drops below $49/bbl ahead of API report

Crude oil prices struggled to build on yesterday's gains and remained under pressure throughout the day with the barrel of West Texas Intermediate plummeting to a fresh daily low at $48.38 in the NA session. As of writing, the barrel of WTI was trading at $48.60, losing 3%, or $1.5, on the day.

The WTI is looking to settle with losses on Tuesday after recording gains for six straight days. Although the markets on Monday saw that the OPEC production output continued to increase in July and reached its highest level of 2017, the heavy selling pressure seen on the greenback allowed the WTI to settle above the $50 mark for the first time in nearly two months.

• OPEC oil output jumps to 2017 high on further Libya recovery - Reuters

With the greenback recovering its losses from yesterday after today's macro data from the U.S., investors' focus shifted to the supply side of the oil, which generally is the main catalyst for the crude oil price action. 

• BP sees oil prices below $55/ barrel in 2018 - RTRS

Later in the session, the API will release its stock report. Last week, the report showed a decrease of more than 10 million barrels in U.S. crude stocks. A rebound in the stock figures could drag the barrel of WTI lower in the post-settlement trade. 

Technical outlook

$50 (psychological level) could be seen as the initial resistance on the upside for the barrel of WTI ahead of $51.05 ahead of $52 (May 25 high).  On the downside, $47.85 (Jul. 26 low) aligns as the first technical support before $46.40 (Jul. 25 low) and $45 (psychological level).