Brent oil drops despite talk of OPEC output cut extension

Brent oil is on the back foot in Asia despite the talk of OPEC output cut extension and growing evidence of tighter US market.

At the time of writing, Brent is down 0.17% or 10 cents lower at $58.10/barrel. Prices clocked a high of $58.83 yesterday.

Analysts and investors expect OPEC, Russia and other major producers extend the global output cut deal beyond its expiry date at the end of March 2018.

Elsewhere, the US Energy Information Administration (EIA) reported that US crude inventories fell by 5.7 million barrels in the week to Oct. 13, to 456.49 million barrels.

Still, prices retreated from the high of $58.83 to end the day on a flat note at $58.15. The upbeat Chian industrial production and retail sales data also failed to strengthen the oil prices.

Technical outlook - Bearish reversal?

Yesterday's Doji candle if followed by a negative price action and an end of the day close below $57.28 (Oct 6 high) could spell trouble for oil bulls. Such a move would confirm bearish doji reversal.