West Texas Intermediate opened the evening session lower after getting a boost near $92.50 per barrel at the end of last week. WTI crude is currently looking to fall for the six consecutive week due to the increasing supplies, according to the weekly reports from the Energy Information Administration (EIA).
Moreover, Saudi Arabia, world’s largest oil producer, is dragging crude lower as exports reach an eight year high. The Joint Organizations Data Initiative reported that Saudi Arabia produces 10.12 million barrels per day and exported 7.84 million barrels in September.
Brent crude fell $.30 to $108.20, while WTI currently trades at $94.275. The Brent-WTI spread fell under $14 to $13.925.
Price action for crude still is trending in a downward channel. Crude will have strong resistance at $94.91, with both the 20 EMA and 61.8 percent Fibonacci level should prevent further upward momentum. The small rally in crude could been seen as the market shaking off some of the overly bearishness in crude. The trend still continues downward and will continue as long as supply and demand data remain the same as weeks past.
The RSI is currently 37 and ticking up, modestly. THe average directional index is still shows a strong trend with a reading over 40. It also has yet to start ticking downward which could mean more downside is possible (ticking down would indicate a break in trend strength). The -DMI is trending down with the recent pullback.
Last week’s EIA crude inventory report showed a 2.6 million barrel surplus versus analyst estimates of .7 million barrels. Wednesday’s report could show further stockpiles as seasonality takes over and less crude is demanded over the course of the winter months.