Oil: Pulled down by over production - BBH

Analysts at BBH point out that the OPEC is producing more oil than expected and US inventories continue to rise and as a result oil prices fell every day last week, culminating with a 9% loss on the week.

Key Quotes

“It was the largest weekly fall in over a year.   The May light sweet crude oil futures contract returned to levels last since this past November, dipping below $49 a barrel before the weekend and finished poorly (just above the session lows).   The market is extended as illustrated by three consecutive closes below the lower Bollinger Band (~$50.30).  That said, speculative market positioning was extreme and long.  The Bollinger Band will move toward prices, but the $50 a barrel area may cap a technical bounce.   The $46-$48 a barrel level basis the May contract offers strong support.”