Spot crude oil prices plunged yesterday and continued their fall into the opening of the early morning hours of the U.S. trading session. Driving the price of the commodity lower was a stronger dollar and traders booking profits from a previous surge in the price of spot crude oil.
As the New York market opened, spot crude oil was trading lower at $80.42, from yesterday’s closing price of $81.43
Some traders have been taking profits this morning from the last bullish run that has commenced since the beginning of February. A possible trigger to the selling was the price of crude oil breaking below a significant trend line on the 4-hour chart.
A lack of news may leave spot crude oil trading influenced more by movements of the dollar and equity markets. Spot crude oil prices typically fall when the dollar appreciates. The dollar has currently pushed to a new low for the month, with the EUR/USD trading lower at 1.3350.
The next fundamental data piece that could swing the price of spot crude oil to a different direction is the weekly crude oil inventories from the Energy Information Administration.
A lack of fundamental factors supporting a rising price of spot crude oil could stall the $12 price rally the commodity has experienced since February 5th. Any further rally may need more than the technical support that the charts are giving, but also fundamental support to show a rise in consumption or potential future demand. Until then the upper resistance line of $84 should contain any price rally.
