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Oil falls for seventh session in a row

FXStreet (Córdoba) - West Texas Intermediate crude oil futures tumbled to levels not seen since late August amid a broad commodity sell off, with news that US reserves of oil rose far above expected, not helping the case. Oil settled down 2.8% at $41.75 a barrel.

According to the EIA report, stockpiles increased by 4.2 million barrels last week, against expectations of a 1.02 million barrels gain. The international market continues to be oversupplied, while the latest data coming from China, shows that the economic slowdown extends in one of the world's largest consumer of energy derivatives.

WTI technical perspective

“The technical picture is pointing for further declines, as in the daily chart, the price is further below a bearish 20 SMA, whilst the RSI indicator has extended down to 31, and maintains a strong bearish tone”, said Valeria Bednarik, chief analyst at FXStreet. “In the 4 hours chart, the technical indicators present strong bearish slopes, despite being in extreme oversold levels, whilst the price has extended far below its moving averages, indicating a strong bearish momentum in the market that points for a retest of the year low around 39.20”.

Bednarik locates next supports at 41.35, 40.65 and 40.10, while she sees resistances at 41.90, 42.50 and then 43.20.

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