3 July 2019, OctaFX – The price of crude oil declined sharply in the US session even after OPEC+ agreed to a continuation of supply cuts. Members will now slash production by more than 1.2 million barrels every day for the next 9 months.
Brent crude declined by 4.01% while US crude declined by 4.8%. This happened after the two benchmarks touched the highest levels in more than five weeks on Monday. While the supply cuts by OPEC were good for crude oil, investors were concerned that the cuts were not high enough. Investors were also concerned about the signs of the weakening of the global economy.
Yesterday, API inventory data showed that crude stocks declined by more than 5 million barrels and later today, EIA is expected to show that inventories declined by more than 2.94 million barrels.
Crude oil price technical forecast
The XBR/USD pair declined sharply to a low of 62.10. This was the lowest level since June 20 and was below all the short and medium-term moving averages on the hourly chart. The RSI moved to the oversold level of 30 and is currently at 32 while the price is along the lower line of the Bollinger Bands. The momentum indicator has continued to decline while the average directional index has reached 48. This means that the pair could continue declining to move below 60.
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