WTI has been under pressure in New York, sliding from $40.60s in the recent trade to an hourly low of 39.89.

WTI has travelled on the day between $39.97 and $40.70 with all eyes on the JMMC meeting as OPEC+ are set to taper its historic oil production agreement.

Meanwhile, the latest news to hit markets is that shale oil output is to drop to a two-year low of 7.49 mln bpd in August according to the US Energy Information Administration which it said in a monthly forecast on Monday. 

The latest market report from the IEA also increased demand expectations relative to last month, but they cite the renewed virus risks as reason to be cautious moving forward.

Reuters reports that the output from seven major shale formations is expected to decline by about 56,000 barrels per day.

US producers have slashed spending and curtailed new drilling as oil prices collapsed this year after the coronavirus pandemic eroded global fuel demand. 

In related news, the US oil and gas rig count, an early indicator of future output, fell by five to an all-time low of 258 in the week to July 10, according to the Baker Hughes data released on Friday.

"We continue to expect a noteworthy rebalancing in 2H2020 despite the OPEC+ tapering, but we see evidence that crude oil prices have priced in much of the positive factors nonetheless, suggesting that caution may also be warranted," analysts at TD Securities explained.

After all, expectations for supply-side support are ebbing with OPEC+ and shale production stabilizing, while demand concerns are rising as the virus spreads in large US states.

Ultimately, we think prices may remain range-bound with a keen eye on virus related data, as well as shale and OPEC+ output. With that said, trend follower positioning remains constrained across the complex amid a high volatility environment.

WTI levels