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OIL.WTI falls below $60 and set for 8%+ weekly decline

Summary:

  • Oil.WTI falls below $60 a barrel for 1st time in 6 weeks
  • Market set for a decline in excess of 8% on the week
  • Price could be set to fall back to $55 level

Its been a bad week for crude bulls with Oil.WTI and Brent Oil both experiencing large declines. Oil.WTI has fallen below $60 a barrel for the first time this year this afternoon and the market is currently lower by around 8% on the week. This is the largest drop in percentage terms since April of last year and the largest in terms of points since December 2016. 

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 Oil.WTI is set for one of its largest weekly declines in recent years. Source: xStation

Turning our attention to the daily chart we can see that the uptrend that has been in place since last summer is under threat with the 8 and 21 EMAs printing a bearish cross (8 below 21). There’s not too much by the way of swing support close below and especially if risk appetite remains soft and the US dollar continues its recent gains then there cold be even more downside ahead. 

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 Oil.WTI has fallen back below the 60.00 level after falling for, what looks at present, like 5 of the last 6 sessions. Source: xStation

 The strong rally seen in the Oil price from last summers low in the low $40s has seen US production shale come back online, with US production overtaking that of Saudi Arabia this week for the first time in almost 20 years. Yesterday, OPEC member Iran also announced plans to increase production within the next four years by at least 700,000 barrels a day. This is one of the first signs of cracks within the cartel which has maintained a remarkably united front as it has successfully reduced output to prop up oil prices after the crash seen a couple of years ago. 

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