Oil fell after increasing by about 10% over the previous two weeks, and technical signs indicated that recent gains might have been exaggerated. After a 2.3% gain the previous week, West Texas Intermediate traded close to $87 a barrel. For more than a week, the 9-day relative strength index for WTI has been above a …
Oil fell after increasing by about 10% over the previous two weeks, and technical signs indicated that recent gains might have been exaggerated. After a 2.3% gain the previous week, West Texas Intermediate traded close to $87 a barrel. For more than a week, the 9-day relative strength index for WTI has been above a threshold that indicates it is overbought. Since mid-June, the US benchmark has increased by about $20 per barrel due to Saudi Arabian and Russian production curbs that have now been extended to the end of the year. Over the weekend, more positive signs emerged. As consumer prices increased in August, deflationary pressures in China marginally lessened, which was encouraging for the world’s largest oil importer. Additionally, financial markets are pricing in a decreased likelihood of a US recession. Saudi Arabia and Russia, two of the leaders of OPEC+, extended their supply restrictions last week. Along with a lesser Russian export cut, the Saudi Arabian production cut of 1 million barrels per day that was previously planned for July will now go through the end of the year.
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