Oil prices are back near the key technical resistance level of 40.00.
Following the test of this level on Friday, prices pulled back lower.
However, since the Asian session, oil prices have been trading rather flat near 40.00.
A breakout above this level will open the way for oil prices to test new highs. But given the lack of any fundamentals to give the bullish push, we expect price action to trade flat near 40.00.
This also potentially opens the risk for oil prices to break down lower. There is a good chance that WTI crude oil might slip back to the 37.67 level in order to establish support more firmly.