Oil retraces previous day’s rally

Crude oil prices fell sharply on Thursday, erasing most of yesterday’s gains, after the US EIA report showed that stockpiles in the country fell by less-than-expected, down by 2.5 million barrels for the week ended July 8th. Late Tuesday, the API reported that stocks surged by 2.2 million barrels, well above the previous 6.73 million decline.

West Texas Intermediate crude oil for August dropped  below the critical 45.00 level and settled 4% around $44.90 a barrel.

WTI technical view

“The technical picture is increasingly bearish according to the daily chart, as the price is now aiming to break below its 100 DMA, whilst the technical indicators retreated from their mid-lines, heading south ahead of the Asian opening,” said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the price broke back below its 20 SMA, whilst the technical indicators maintain strong bearish slopes after breaking below their mid-lines, supporting a new leg lower on a break below 44.40, this week low.”

Support levels: 44.40 43.70 43.10. Resistance levels: 45.30 45.90 46.60.