Crudeoil settled down -2.54% at 2684 on signs of U.S. oversupply and weak Chinese manufacturing and notching the longest weekly losing streak in almost three decades. Crude dipped below the $40 threshold following weekly data that showed U.S. energy firms added two oil drilling rigs last week, the fifth increase in a row. The rise in the number of rigs emerging after a second quarter lull in prices is adding to concerns U.S. shale production is proving slow to respond to falling prices, prolonging a global glut. Energy markets slid early in the day as world stock and currency markets joined an extended rout across raw materials this week, a slump accelerated on Friday by data showing activity in China's factory sector, a huge user of many commodities, shrank at its fastest pace in almost 6-1/2 years in August. With deepening gloom over demand growth from the world's second-biggest oil user, and expectations for a significant build-up in surplus oil stocks this autumn, most oil traders were unwilling to fight the tide. Oil market speculators cut their bullish bets on U.S. crude to the lowest level in five years, reducing combined futures and options positions in New York and London by 14,884 contracts to 89,035 in the week to Aug. 18, the U.S. Commodity Futures Trading Commission said. The current collapse in oil prices, the second this year, has raised alarm within the OPEC, including some of its core Gulf members. However, there is no indication they will reverse their policy of keeping production wide open to defend market share, delegates told. Technically, now Crudeoil is getting support at 2651 and below same could see a test of 2617 level, And resistance is now likely to be seen at 2738, a move above could see prices testing 2791.

Trading Ideas:

Crudeoil trading range for the day is 2617-2791.

Crude oil prices ended with heavy losses on signs of U.S. oversupply and weak Chinese manufacturing.

Crude dipped below the $40 threshold following weekly data that showed U.S. energy firms added two oil drilling rigs last week, the fifth increase in a row.

The current collapse in oil prices, the second this year, has raised alarm within the OPEC, including some of its core Gulf members.