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Oil Market Analysis 4 June 2012

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The ongoing turmoil in the financial markets and the apparent synchronised slowdown across all the major economies have finally taking their toll on the price of oil which, at the time of writing, has fallen to $83 per barrel.  The next price point is, of course $80 per barrel with perhaps even a fall down as far as the platform of support in the $75 per barrel region.

With strong selling pressure now in evidence on both the daily and weekly charts these are both giving us strong confirming signals that the bearish trend for the WTI contract is now firmly established.  In particular one of the key features of the current price action is the volume on the daily chart which has been increasing steadily over the last few days.  For those of you familiar with volume price analysis this is a strong signal of increasing selling pressure and as a result the downwards momentum looks set to continue.