Oil breaks below $48.00, weighed down by global uncertainty

Extending its downslide for second consecutive day, WTI crude oil dropped back below $48.00 level as Brexit-led economic uncertainty seems to make a comeback and is weighing on investor sentiment. 

On Monday, the black gold witnessed a down day as increase in the number of US oil rig counts resurfaced worries over supply glut. The commodity failed to get respite despite of fresh attacks on Nigeria's oil infrastructure on Sunday. 

Adding to the bearish sentiment surrounding crude oil prices, uncertainty surrounding economic implication of the historic Brexit referendum is boosting demand for the perceived safe-haven appeal of the US Dollar on Tuesday and is denting demand for dollar-denominated commodities - like oil.

Oil traders now look forward to Wednesday's FOMC meeting minutes that would provide further direction to the greenback and eventually drive crude oil prices in the near-term. In the meantime, traders will further have an update on the demand-supply scenario from Wednesday's API report on crude oil supplies ahead of the official EIA's weekly inventory on Thursday.

Technical levels to watch

On a sustained trade below $48.00 level, the commodity seems to immediately drop towards $47.50 intermediate support before it turns vulnerable to head back towards retesting a multi-week low level support around $46.00 region. On the flip side, recovery momentum above $48.40 immediate resistance seems to boost it back towards $49.00 handle, which if conquered decisively would set the stage for resumption of the near-term bullish trajectory.