crude oil prices dropped more than 2.7% on Friday after OPEC announced it had
agreed to roll over its policy of maintaining crude production in order
to gain market share. This easily offset a drop in oil rigs which could
reduce U.S. production. Baker Hughes reported its weekly count of U.S.
oil rigs fell by 10 to a total of 545, compared with 1,030 a year ago.
This is the third consecutive week of declines.
Oil prices generated an outside day on Friday. This is where price action generates a higher high a lower low and a lower close which is generally considered a reversal pattern. Resistance is seen near the 20-day moving average at 41.84, which support is seen near last week’s lows at 39.84. Momentum has turned negative with the MACD (moving average convergence divergence) index generating a sell signal. This occur as the spread crosses below the 9-day moving average of the spread.
