Oil slumps further after the surge in energy prices cools

Technical Analysis

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A setback for oil at least in the short-term

WTI crude is now down over 2% to $75.50 levels while Brent is also marked down to just below $80 on the day, as the retreat from yesterday continues.

The retreat in energy prices is playing some part in all of this as the hype cools off but in the case of WTI, it comes as price came close to testing the key $80 mark this week. The high hit $79.76 before things started turning around in favour of sellers.

Right now, the shove lower even sees buyers lose near-term control on a drop below the key hourly moving averages @ $77.04 and $76.04 respectively. The weekly chart has a gnarly-looking candle forming as well so that’s something to be wary of:

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We’re also seeing price fall back below key resistance @ $76.88-96 so that is knocking some wind off the sails of buyers in the short-term at least.

A tighter market going into next year may keep prices underpinned but for now, perhaps we have seen a short-term high posted before the next catalyst comes along.

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