NYMEX Oil, Brent Reverse Course

NYMEX Oil, Brent Reverse Course

NEW YORK (DTN) -- New York Mercantile Exchange oil futures reversed lower from fresh highs Tuesday morning and after two consecutive sessions with gains, as the technically-driven short-term uptrend ran into overhead resistance.

At last look, NYMEX April West Texas Intermediate crude futures were down 46cts at $37.44 bbl, reversing off a three-month high on the spot continuation chart of $38.39. Retracement resistance is marked at $38.21 and again at $40.00 bbl.

May Brent crude futures on the IntercontinentalExchange fell 37cts to $40.47 bbl, reversing off a fresh three-month spot high of $41.48 in the face of retracement resistance at $41.26 bbl.

In products trade, NYMEX April ULSD futures slipped 0.25cts to $1.22 gallon, after posting a three-month high on the spot continuation chart of $1.2425, with resistance marked at $1.2511. April RBOB futures edged lower after rallying to a better-than three-month spot high of $1.4160, with resistance at $1.4296.

Oil futures were pressured by data from China that showed a slump in exports joined by a research note from Goldman Sachs casting doubt on the sustainability of the recent run-up in oil prices also curbed enthusiasm for WTI contracts. Goldman said a $40 bbl price for WTI is unsustainable.

Despite a plunge in export data, new trade data from China released overnight showed crude oil imports up 19.1% to 8.0 million bpd in February from January. Still, the drop in exports bodes poorly for its economic growth. Over the weekend, China lowered its growth target to 6.5% to 7.0%, with the move seen as an acknowledgement of slowing growth in the world's second largest economy.

Weak economic data could force Chinese policymakers to inject more stimulus measures to jumpstart growth, analysts said.

At midday New York time, the Energy Information Administration is scheduled to release its Short-term Energy Outlook that will provide a clue to global demand and U.S. production expectations. The monthly outlook is followed the American Petroleum Institute's 4:30 PM ET oil inventory report for the week-ended March 4, with the EIA issuing its weekly set of statistics Wednesday morning.