Crude oil futures dipped lower on Monday as the Tropical Storm Harvey stop refinery activity along the U.S. Gulf coast.
According to reports from the Bureau of Safety and Environmental Enforcement on Monday – approximately 331,370 oil barrels per day (bpd), or 18.94%, of the current oil production of 1,750,000 bpd in the Gulf of Mexico has been shut-in.
Tony Headrick, energy market analyst at CHS Hedging said – “The reduced inputs to those Gulf refineries will result in an increase in crude inventories.”
The American Petroleum Institute (API) is due to release its weekly oil data later on today.
Technical Outlook
Short Term View
Crude oil prices broke below the support at $47.40 as mentioned in yesterday’s analysis. Crude oil prices are expected to hit the resistance line and then bounce back towards $46-44 level.
The 4H intraday chart has formed “Descending broadening wedge pattern” as prices broke below the support line at $47.40. Today, Crude oil prices might retrace towards the slope line at $47.40 which will be a selling opportunity and further downfall can be expected towards $46-44.
Long-term View
The daily chart has formed Megaphone chart pattern as prices failed to hold above resistance line at $50. Currently, prices trade around the 50-day moving average at $46.89 which indicates a bearish momentum.
Resistance holds on the 100-day moving average at $47.60 and additional resistance on the 200-day moving average at $49.63. Support is on 50-day moving average at $46.48.