Crude oil has been selling off continuously after hitting its most recent peak on September 25. Both WTI and Brent crude continue to trade lower. WTI is currently below $52, and is trading close to $51.30. Meanwhile, Brent crude is trading close to $56.30.
After hitting overbought levels since last Monday, crude oil is now returning to more normal trading conditions. Despite the threat of supply disruptions and violence in Iraq's Kurdistan region, political instability has had a limited impact on oil prices so far.
Instead, the market is digesting news that US exports continue to climb. US Energy Information Administration data suggests that crude oil exports continue to jump. Today saw India receiving its first-ever shipment of US crude oil, with more Asian refineries looking to buy crude oil given the relatively lower price of WTI relative to Brent crude.
After peaking on September 25, both Brent crude and WTI prices have fallen and are trading sideways. Despite fears of violence in Iraq's Kurdistan region and falling oil stocks, crude oil has been unable to continue its bullish momentum. We warned that crude oil looked overbought last week, based on various technical indicators when looking at a daily chart. This remains true today, and we expect the commodity to ultimately return to normal trading conditions in the coming days.
Crude oil remains bullish in the medium term, having rallied from its most recent lows in the first week of June. The commodity has continued to soar for a variety of factors, including falling oil stocks, refinery demand following hurricane-related disruptions in the US, and hope for an extension of the OPEC supply cuts. Looking at various technical indicators on the weekly chart, crude oil is starting to look overbought, but remains within normal trading conditions.