Oil falls sharply to end 3% lower on the day

Oil futures finished sharply lower on Thursday, correcting after two sessions of gains, but prices posted gains the first half of 2016 as recent global output disruptions and US inventories helped to counter the global supply glut.

West Texas Intermediate crude for August fell $1.55, or 3.1%, for the session to settle at $48.33 a barrel on the New York Mercantile Exchange. The most active contract for oil has gained more than 30% year-to-date.

WTI technical perspective

“Daily basis, the price has moved back below a modestly bearish 20 SMA, whilst the technical indicators turned slightly lower around their mid-lines, presenting a neutral-to-bearish stance,” said Valeria Bednarik, chief analyst at FXStreet. “The decline extended down to 48.15, where a bullish 20 SMA contained the decline in the 4 hours chart. Still, technical indicators in the mentioned time frame turned sharply lower and are crossing their mid-lines towards the downside, whilst the bounce from the SMA has been quite shallow indicating the risk towards will likely persist.”

Support levels: 48.20 47.50 46.90. Resistance levels: 49.20 50.00 50.60.