Crude oil prices sell-off as a result of increase by top output countries.
28-05-2018 10:30 AM
Oil prices traded lower on Friday and continue to trade lower on Monday morning lengthening a turn down in the previous session, as the market gazed an increase in output from the world's three top crude producers, Russia, the United States and Saudi Arabia.
Brent and WTI have fallen by 6.4 percent and nearly 9 percent respectively from peaks reached earlier in May.
The Organization of the Petroleum Exporting Countries (OPEC), as well as top producer but non-OPEC member Russia, started withholding supplies in 2017 to tighten the market and prop up prices, which in 2016 fell to a more than a decade low of under $30 per barrel.
Crude oil prices sell off for the past five days and on the long-term view, the crude oil daily chart has formed “Rising wedge” pattern. In par with this pattern, prices are on the way to support area at $65.25(4400) which is the long-term additional support line. This place may be a stopping point or a trend reversal may or may not happen during the day. RSI overbought reduced overheating from 70% to 35 %. A bounce back is likely to reach $67-68 (4525-4600), while it hits 30 % level. On the alternate scenario, if crude oil prices close below $65(4385), the trend could continue and result in a massive fall up to $60(4050), Crude oil trader should monitor price values.