Oil may fall below $80 as futures approach a “death cross” formation in which a shorter-term moving average crosses below a longer-term average, according to technical analysis from EOXLive.
December futures on the New York Mercantile Exchange may approach the intraday low of $79.12 reached on June 28 if the 50-day moving average, at $91.45 a barrel on Nov. 9, falls below the 100-day average at $91.08, the analysis by Tom Pawlicki, director of market research at the Chicago-based commodity- trading firm, showed.
“When there is a cross to the downside, we are about to see some additional selling,” Pawlicki said. “It indicates that we could probably move down to the June low.”
The last time the contract’s 50-day average crossed below the 100-day was May 23, after which oil fell 15 percent to the June low.
Oil for December delivery gained 98 cents, or 1.2 percent, to settle at $86.07 a barrel Nov. 9 on the Nymex. Futures have dropped 13 percent this year. Prices slid to $84.44 on Nov. 7, the lowest settlement since July 10.
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