Oil Prices Vulnerable – Strong Close Under $100 On Weekly Chart
Oil Price Analysis 26th June 2012 – Forex-FX-4x
The price of oil experienced a significant drop last week as Brent crude dropped strongly under the key $100 level; price has been consolidating around this $100 handle for weeks now but finally moved as low as $88.49 before closing at $91.33 for the week. Brent crude oil has dropped from a peak of around $125 per barrel in March to the aforementioned $88.49 level. This has seen a major technical development take place as the double top has triggered to the downside. A break of the neckline has coincided with a break below $100 oil.
Chinese data has weighed on the price of oil recently as this major consumer is the driver for global oil demand and a negative outlook has seen prices drop lower. Add to this the fact that the US Fed voted against QE3 measures last week and extended the “Operation Twist” program which has not convinced the markets in the least. Saudi Arabia is producing in excess of 10 million barrels per day (mbpd) – which is the highest output recorded and looks to be more than enough in the current climate.