Article by ForexTime
Crude failed to sustain gains above 46 a barrel is heading south again. Ample supply is weighing on prices and output from Iraq alone exceeds 4 million barrels a day according to oil minister Adel Abdul Mahdi. OPEC output remains above target and U.S. crude stock piles continue to rise and are more than 100 million barrels above the five-year seasonal average. No sign of relief then for oil and gas companies, which are facing sharp losses and have reported more than USD 19 billion write-downs in a single week.
Traders await Friday’s Baker Hughes rig count which will give traders a better idea of future U.S. production. Prices were unable to breach the 20-day moving average at 46.41, and could move back into a range that is floored by 42.59. Momentum remains negative with the MACD (moving average convergence divergence) index printing in the red with a downward sloping trajectory.
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