Weaker manufacturing data from China and the euro zone weighed on oil prices Thursday.
The May 12 West Texas Intermediate futures contract dropped below key support of $104.88, which is the 50 percent retracement of the February rally that took the contract from $98.38 to $110.95.
Below that, the 50-day moving average on the prompt continuation chart comes into play. That level is currently $102.87.
"There isn't much to stop us from getting there," says Addison Armstrong, senior director of market research at Tradition Energy. "Fundamentals are winning out today. It looks like a hard landing is coming in China and the euro zone is still weak."
In addition to poor economic data — from both China and the euro zone — traders say early forecasts call for INCREASE in oil supplies in Cushing, Okla. next week (after Wednesday's EIA report showed the first decline in 4 weeks).
All of that and general "risk off" sentiment is combining to pressure U.S. oil prices.
President Obama Thursday, on a four state energy road tour, announced that he is accelerating the approval process for the length of the proposed Keystone XL pipeline that connects Cushing storage with the Gulf coast.
Once it gets approval to proceed, TransCanada Corp hopes to complete the $2.3 billion, 485-mile pipeline section next year.
Follow Sharon on Twitter: @sharon_epperson