According to the West Texas Intermediate (WTI) statistics for April, crude oil prices fell by 1.6% and closed at $48.49 per barrel on the 10th of March this year, falling below the 200-day moving average.
Basically, such prices fell by 9% in the last three trading sessions, trading at a three-month low. According to experts, this was due to several reasons, including a rise in oil production in the US to a 13-month high; a massive increase the country’s oil inventories to a new record; a record increase in the number of the country’s oil rigs; the production cut by major oil companies not able to remove surplus oil from the global market; and Russia’s lower compliance to the production cut deal last month.
From December last year to early March this year, crude oil prices were said to be at a range-bound between $50 and $54 per barrel. However, prices had fallen below $50 per barrel on March 9.
And recently, crude oil futures are hitting below their 20 and 50-day moving averages of $52.5 and $52.7 per barrel, suggesting that prices are experiencing a bearish momentum.
According to the senior analyst at Kase & Company, Dean Rogers, the recent crash tested key technical levels of support that is established this 2017, dropping below standard moving averages for the first time since the deal with Organization of the Petroleum Exporting Countries (OPEC) was announced. He said:
“The move down is in oversold territory, but otherwise, there is very little evidence that it will end.”
All these things indicate that the uptrend is reversing. Meanwhile, broader markets like the S&P 500 and the Dow Jones Industrial Average have increased by 0.3% and 0.2%, respectively.