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Why Are Oil Prices Continuing to Fall?

Oil prices slumped for a third-straight session Wednesday, as comments from Saudi Arabia raised expectations of increased supply and after weely data from the Energy Information Administration (EIA) showed inventories climbed far more than projected.

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AP

Brent crude futures tumbled more than 3 percentto below $108 a barrel. And U.S. light, sweet crude also fell more than 3 percent, trading near $92 a barrel. The contract expires on Thursday.

Here are some of the bearish signals the market has been watching:

  • In addition to huge build in oil supplies, there's been a dramatic decline in distillate demand—down 11 percent year-over-year.
  • Brent crude broke below its 200-day, 50-day moving averages and Fibonacci retracement level. These are key technical indicators—and reinforce bearish sentiment in this market.
  • U.S. oil prices may be headed to $90 a barrel, after hitting $100 just last Friday.
  • One short-term bear's outlook: John Kilduff of Again Capital said WTI oil could be headed toward $88 a barrel.

Follow Sharon on Twitter: @sharon_epperson

Disclaimer

  • Patti Domm

    Patti Domm is CNBC Executive Editor, News, responsible for news coverage of the markets and economy.

  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

  • Peter Schacknow

    Senior Producer at CNBC's Breaking News Desk.

  • Dominic Chu is a markets reporter for CNBC.

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