Oil Dips Below $45 After EIA Forecast
Oil futures dipped below $45 a barrel yesterday, settling at the lowest level in nearly two weeks after the Energy Information Administration lowered its crude-oil price forecasts for this year and next. Prices also saw pressure ahead of weekly data that’s expected to show a rise in U.S. crude supplies.
On the New York Mercantile Exchange, October West Texas Intermediate crude fell $1.79, or 3.9%, to settle at $44.15 a barrel. October Brent crude on London’s ICE Futures exchange fell $1.94, or 3.9%, to $47.58 a barrel.
Both contracts saw their weakest settlement since Aug. 27. Overall, oil prices have fallen by around 17% so far this year.
In a monthly report, the EIA said it expects WTI prices to average $49.23 a barrel this year, down from a previous forecast of $49.62. It also reduced its forecast to $53.57 for 2016, versus $54.42. For Brent, its 2015 forecast was at $54.07, down from the previous forecast of $54.40.
Oil prices lost more ground after the report. Considering the overall technical and fundamental outlook, waiting for a solid reversal candle on daily chart appears to be a good strategy in short to medium term.