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Oil Drops on Oversupply and Strong USD

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Oil fell close to an 11-year low, pressured by a relentless build in oversupply, and as the dollar strengthened after the U.S. Federal Reserve raised interest rates for the first time in nearly a decade.

Brent crude for February delivery, the front-month contract from Thursday, fell 9 cents to $37.29 a barrel. The global benchmark lost 3.3 percent in the previous session.

A dip below $36.20 will be the lowest since July 2004. Analysts said such a move in the run up to year-end would be likely.

“The price action is likely to remain violent, but the odds are on lower numbers,” said PVM Oil Associates technical analyst Robin Bieber. “Stick with the trend. It is not advised to be long.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza

@alfonso_forex

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