WTI falls off a cliff, approaches $45

After making a modest recovery in the European session, crude oil encountered a fresh selling wave as American traders came back from the Independence Day holiday, with the barrel of West Texas Intermediate losing 3.3% as of writing at $45.50.

Following a correction move that went on for eight straight days, crude oil reversed course again after Russia announced its opposition to deeper oil production cuts at the OECD’s Ministerial meeting later in July. "The air is getting thin for oil prices. The price increase just ran out of steam, which is not very surprising, given the newsflow of rising OPEC supplies," Carsten Fritsch, senior commodity analyst at Commerzbank, told Reuters.

On the other hand, the greenback is preserving its strength since the start of the week, further increasing the pressure on the West Texas Intermediate. Ahead of the FOMC meeting minutes, the US Dollar Index is consolidating above 96, gaining 0.1% on the day.

• US Dollar retreats from tops, still above 96.00

Technical outlook

$45 (psychological level) is now seen as the first target before $44.65 (Jun. 29 low) and 43.65 (Jun. 28 low). On the upside, resistances align at $46.00, $47.25 (50-DMA) and $48 (psychological level).