Oil tumbles after failing to hold a key level
West Texas Intermediate crude oil is under pressure, down 1.9%, or $0.91, at $47.83 per barrel after failing to hold its 200-day moving avearage. The energy component climbed as high as $49.28 early Tuesday, but surrendered those gains and slipped back below key support provided by the 200-day moving average near $49.00.
Heavy selling took hold on Tuesday afternoon, pushing oil down to its lowest level since March 27. Traders are watching the $47.34 mark closely, as a close below there would be the lowest since the end of November.
On Wednesday, data released by the Energy Information Administration is expected to show US oil inventories fell by 3.5 million barrels, according to a Bloomberg survey. Gasoline stockpiles are expected to have increased by 1 million barrels.
WTI has been under pressure as of late. The energy component struggled near the $54, and started to move lower after data released on April 20 showed a smaller than expected drawdown in oil inventories and the first jump in gasoline supplies in several months. Its price remained under pressure last week despite inventories posting their biggest drop of the year.
WTI has fallen about 11% so far this year as talk of OPEC extending its production cut through the end of the year has failed to provide support.
Meanwhile, Brent crude oil, the international benchmark, is down 2.2% at $50.34 per barrel on Tuesday, and has lost 10.9% this year.
