WTI headed for a strong close for the week still, despite the sell-off
|Oil plummeted by over a buck on Thursday, to below the 100 hour MA at $51.64 and to $51.32 the low, paring back the previous session's gains to $52.93bbls (a fresh swing high) in European trade, (but prices keeping a tight grip on their gains for the week).
Looking around for a culprit, hard to find, but oil settled higher on Wednesday after the EIA data that arrived with an unexpected 1.8 million barrel decline in crude inventories in the week ended Sept. 22, with the draw attributed in part to a surge in exports. (Post-hurricane operations in the Gulf Coast seem to have stabilized based on this data). Mind you, there has been little to go on in the move but profit taking seen to be exacerbating the downside in technical trading likely to be blamed for the slide on an overextended upside for September's trade. Also, WTI moved to a wide discount to UK's Brent crude in recent weeks due to the overseas demand from the Hurricane disruptions, hence a strong close in WTI that is still up over 1.5% for the week, poised for a monthly rise of 7.5%.
Oil levels
Valeria Bednarik, chief analyst at FXStreet noted that the price remains far above its 100 and 200 DMAs, both lacking directional strength some $5.00 below the current level, becoming irrelevant for short-term analysis, but somehow limiting chances of a stronger recovery, as the shorter is well below the larger.
"Shorter term, and according to the 4 hours chart, the bearish momentum is strong, as technical indicators entered negative territory, maintaining their downward slopes with sharp downward slopes. In this last time frame, the 100 SMA aims north around 50.00, becoming a possible bearish target in the case of further declines," she explained, adding that the support levels are 51.20, 50.50, and 50.00 with resistance levels at 51.90, 52.35 and 52.70.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.