WTI Crude Daily Update for September 1, 2016

WTI crude oil prices traded under the 45 per barrel mark for the first time since August 15, touching 44.51 lows, as the combination of higher U.S. inventories, and a firm dollar continue to weigh. Bigger picture, an OPEC production freeze is not expected at the September meeting in Algiers, despite recent comments from Iraq’s oil minister, who said he would support a freeze.

Prices were unable to move above resistance near the 10-day moving average near 47.27, and are more likely to test support near the 200-day moving average at 40.76.  Momentum has turned negative as the MACD (moving average convergence divergence) index recently generated a sell signal. This occurs as the spread (the 12-day moving average minus the 26-day moving average) crosses below the 9-day moving average of the spread.  The index moved from positive to negative territory confirming the sell signal.