Oil uptrend gives way as selling accelerates in sixth day of declines

16 June 2016, 15:10
Sherif Hasan

Strong dollar and rising supplies weigh

WTI crude is down nearly 2% in a broad commodity slump.

Oil fell yesterday then rebounded on an unexpected drop in US inventories. However, all the gains evaporated and it closed at the lows yesterday. The downward momentum has continued today as the US dollar gains against the euro, sterling and commodity currencies.

Technically, the outlook is darkening after an extended run beginning in February. The decline today breaks that uptrend.

Oil is also approaching a seasonally weak period of the year

An initial target of the decline might be the 55-day moving average, which is just below $45 today.

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