Oil falls sharply, halts winning streak

Oil prices fell sharply on Monday, weighed down by uncertainty over Saudi Arabia’s oil policy after the kingdom replaced its oil minister and decreasing worries about wildfires in Canada.

West Texas Intermediate for June delivery fell as low as $43.27 a barrel, before settling a few cents above at $43.44/bbl, posting a 2.7% daily decline. With today’s loss, WTI halted a 4-day winning-streak.

WTI technical view

“The strong intraday decline has made the commodity close below its 20 DMA for the first time since April 7th, whilst the technical indicators are crossing below their mid-lines with sharp bearish slopes, indicating the decline may extend further during the upcoming sessions,” said Valeria Bednarik, chief analyst at FXStreet. “Shorter term, the 4 hours chart shows that the price has settled below its 20 and 100 SMA, although the technical indicators have lost their bearish strength and are currently aiming to recover, still within negative territory. Nevertheless, if the slide extends beyond the mentioned support, chances are of a test of the 40.00 figure, where strong speculative buying interest is expected to halt the slump.”

Support levels: 43.20 42.50 41.80. Resistance levels: 44.05 44.70 45.60.