Crude oil is heading lower for a second day on Tuesday with a loss of 0.70% in early futures trading. The price of WTI crude is seeing a double top at $46.00 formation on the daily chart and could head lower.
The U.S. dollar has seen a small bounce over the last two days and this is weighing on oil. The dollar index has been under heavy selling pressure since the U.S. election and a relief rally is possible in the coming sessions.
Last week’s OPEC deal was a disappointment for markets after the group raised supply by 500k barrels per day when an extension to the existing supply was expected. OPEC’s token rise was an attempt to settle disagreements amongst the group. The dollar will now weigh on prices as vaccine hype settles down and the next path will be decided by inventories from the API this afternoon, and the EIA tomorrow.
Crude has stalled at the $46.00 level and now points lower. The key support is the $43.50 level which was the August high. If oil moves lower then the 50-day moving average is at $41.00. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
