WTI falls hard in a continuation of the Feb decline on production and higher vol

• WTI keeps dropping.
• WTI headed for a break of the lows?

WTI has dropped below the $62 handle on the back of another weekly rise in U.S. crude stockpiles, poised for the lowest finish since January 8th.

Spot fell from $63.69bbls to $61.29 while the March West Texas Intermediate crude contract dropped $1.11, or by 1.8%, at $62.28 a barrel on the New York Mercantile Exchange.

WTI lower despite correction on Wall Street

The price of oil is correlated to the performance of Wall Street that fell sharply with the DJIA making a record plunge in terms of points this week on concerns of the return of inflation, sparked by the detail behind the impressive NFP results in terms of wages. ( The return of volatility to stocks has been triggered by a spike in the VIX). A period of consolidation and a correction could be on the cards of the positive correlation kicks in again.

Also, investors are worried over rising U.S. oil production with the EIA’s weekly report making for an output figure that climbed 332,000 barrels to total 10.251 million barrels a day which is a weekly record based on EIA data going back to 1983.

Oil levels

The low has been 61.20 and bears look for a break below 61.09 (low Jan.5) ahead of 60.79 (55-D SMA). The hourly RSI is in oversold territory with momentum indicators bearish signalling further declines on a break of aforementioned support. Only above 64.42 (21-D SMA) would put the bulls on target for 64.72 (10-D SMA) ahead of 66.35 (high Feb.2).