U.S. West Texas Intermediate and international-benchmark crude oil futures are in a position to finish lower for the week. WTI is down about 2.8% and Brent is off by about 2.2%. Sentiment in both markets is pointing lower, having shifted from positive earlier in the week on reports of tightening supply, to negative for the week on renewed concerns over rising U.S. production and its impact on global supplies.
Both futures contracts came close to testing or taking out their 200-day moving averages, which would have wreaked havoc for traders since many of the hedge and commodity funds have protective stops parked under this bullish technical indicator.
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Crude oil fell to a one-month low on Thursday as traders continue to react to rising U.S. crude stockpiles and their potential impact on the OPEC-led attempt to trim the global supply and stabilize prices. The intense selling pressure, which began last week, materialized despite escalating political turmoil in Venezuela and the expanded sanctions against Iran that are designed to drive the nation’s exports to zero.
To recap Wednesday’s U.S. Energy Information Administration’s weekly inventories report for the week-ending April 26, U.S. crude stockpiles surged 9.9 million barrels, while U.S. oil production ticked up to a record 12.3 million barrels per day. Furthermore, the report showed that U.S. stockpiles have risen in five of the last six weeks, dimming reports…