WTI drops below $55 as OPEC sounds cautious regarding oil market outlook

• OPEC says oil market fundamentals are "somewhat bearish" for rest of year.
• Crude oil loses traction following OPEC's monthly report.
• WTI erases majority of daily recovery gains, trades below $55.

Crude oil prices came under pressure in the last hour as OPEC in its monthly outlook painted a gloomy picture of the market outlook. The barrel of West Texas Intermediate, which rose to a daily high of $55.64 earlier in the session, retraced a large portion of its daily rally and was last seen trading at $54.80, still up 0.25% on the day.

OPEC acknowledges economic slowdown

In its August Oil Market Report, OPEC said that the outlook for oil market fundamentals seems "somewhat bearish" for the rest of 2019. Citing global economic slowdown, OPEC also lowered its forecast for 2019 global oil demand growth to 1.10 million barrels per day from 1.14 million barrels per day. 

Later in the day, General Electric Co's Baker Hughes energy services firm will release its weekly oil rig count. Last week, drillers cut six oil rigs in the week to August 9 to bring the total count down to the lowest level since February 2018 at 764. If Baker Hughes reports another drop in rig count, crude oil could stage a modest recovery before settling for the week.

Technical levels to watch for