Crude Prices Drop for Second Straight DayOil prices have dipped on Tuesday and are down over 3% this week. Will the downward trend continue? We could see stronger movement on Wednesday, with the release of U.S. GDP and an expected rate cut from the Federal Reserve.
With signs of an oversupply of crude on the global markets, OPEC could play a key role with regard to oil prices. The current OPEC agreement runs out in December, and there will likely be a push to continue to reduce output and boost crude prices. Historically, however, OPEC members have had difficulty reaching agreements on lower output quotas, with some countries reluctant to reduce revenue from oil exports.
Crude Technical Analysis
I continue to keep an eye on the 50-EMA, which is currently at 55.24. Crude prices broke above the EMA line last week, and this line has broken again in the North American session. This could point to some fluidity in oil prices until a tend can be established. On the upside, there is resistance at the 58.00 level. On the downside, we find support at 53.00. This line was tested in mid-October, but has weathered the downward pressure and has some breathing room.