Breaking News

Tweet TWEET

Crude May Decline as Prices End Below $90: Technical Analysis

Oil may drop below $80 a barrel after settling below $90 for a second day, according to a technical analysis by Bill Baruch, senior market strategist at Iitrader.com in Chicago.

Failing to break above $90, near the November contract’s 100-day moving average of $90.60, may send futures to the July 25 intraday low of $87.50 and trigger a further decline, Baruch said. After closing below the 100-day moving average at $99.68 on May 4, the November contract fell to $78.73 on June 28, the intraday low for the year.

“The continued close below $90 will encourage selling,” Baruch said. “It’s going to get ugly if we break that $87.50 level. We could go all the way down to this year’s low near $78.”

Oil for November delivery slid 55 cents, or 0.6 percent, to settle at $89.33 a barrel yesterday on the New York Mercantile Exchange. It was the third close below $90 in four days.

Prices may rebound if they stay above $87.50 this week, Baruch said. The November contract expires on Oct. 24.

To contact the reporter on this story: Moming Zhou in New York at Mzhou29@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.