WTI Crude Oil (current price: 44.22)
Oil declined for the second day in a row following the reversal on Monday. WTI Crude finished the session with a 2% loss, below the $45 level. The commodity is still facing a supply glut despite the decline in U.S. output as the other major producers refuse to cut back on their supply. Oil rallied by more than 50% since February, despite the negative fundamentals. Investors think that the recent deterioration of global economic conditions might lead to another sharp decline in the price of the Black Gold, which could weigh on commodity currencies in the coming months.
Our assessment: Oil is likely headed for a re-test of the important support zone near 43.75. The rising trend-line at 41.50 might also be in play, as the priced moved out of the triangle pattern that we have been monitoring.
