Crude Oil Price Analysis for March 14, 2017

Oil prices moved lower but were able to bounce after printing below the 48 handle for the first time since November.  Prices have declined 9% since last Wednesday larger than expected build in crude oil inventories reported by the Department of Energy.  On Friday, Baker Hughes, the oil service giant reported an increase in active drilling rigs, which put the total to the largest number of producing rigs since September 2015.

Crude Oil is Oversold

Prices are poised to test support near an upward sloping trend line that comes in near 47.50.  Resistance is seen near the 10-day moving average at 51.65.  Prices are currently oversold. The RSI (relative strength index) is printing a reading of 25, well below the oversold trigger level of 30. The last time crude was this oversold in January 2016, it rebounded $17 per barrel.  Momentum remain negative as the MACD (moving average convergence divergence) index is printing in the red with a downward sloping trajectory which points to lower prices.