Moments ago, soothing words by Saudi Arabians notwithstanding, both Brent and WTI, had another step move lower, with Wext-Texas Intermediate sliding under $43, a fresh 6 year low, and well below the January lows of $44.37! What may be causing it: well, aside for "more sellers than buyers", and a rumor that Genscape reporting another major inventory build at Cushing, a breach of a key support line may be the reason. BofA explains.
CLJ5 has broken down overnight, breaking the Jan-29 lows at 44.37 (CLK5 needs to break 45.52, it's not there yet). This points to a continuation of the long term bear trend, exposing the confluence of long term support between 41.15/37.80. Into here we look for greater signs of basing. especially as Brent, Gasoil, RBOB and HO are not at risk of breaking their January lows, setting up the potential for bullish price divergences.
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