Crude oil prices declined aggressively on Wednesday, with Brent has registered fresh nearly one-month lows around $57.20. Today, the prices are making some recovery attempts but struggle to get back above the $58 handle and remain under pressure in general.
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 API 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.