Summary:
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Another day of heavy selling in crude oil
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Oil and Oil.WTI fall over 5%
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Oil drops to lowest level in over a year <$60.
It’s been one-way traffic for the price of crude of late with wave after wave of selling hitting the market and sending it sharply lower. Today’s session has seen new lows for both Oil and Oil.WTI with both benchmarks declining over 5%. There’s not been any new fundamental developments to support these declines as it seem to be more a case of an extension to an already major downtrend which has seen huge declines in the past 7 weeks from October 3rd, which has seen a slump of 32%. This week alone, Oil is down by 12% and set to post a 7th consecutive lower weekly close.
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Oil has plunged by around $4 today alone with price dropping beneath the $60 handle to trade down to 59.02. Source: xStation
Whichever way you look at it, Oil is clearly trending lower and while it is clearly oversold, that is not to say there won’t be more downside ahead. Looking at the RSI on a D1 chart we can see that the current reading of around 20 is not far from recent lows of 18.3 and indicates an extremely low level. However, until there’s a reversal signal this drop could well continue and trying to catch a falling knife here is reserved purely for the brave - or foolhardy depending on the way you look at it.
Oil has made another decisive break lower today with the market on several occasions during this larger decline seeing small periods of consolidation precede the next leg lower. The RSI is below 20 and close to recent lows of 18 indicating extremely oversold conditions. Source; xStation
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