Surprise to all Crude Oil Forex Online Traders – Sharp decline below $50 per Barrel

The Crude is experiencing a sharp decline in the prices with the close of last Asian trading session. It plunged 4.2 percent to a close at 50.05 per barrel (an intraday lowest at 48.84) on Monday, when the International Energy Agency (IRA) revised its fall in 2009 demand on last Friday. After this forecast the Stock markets' were opened in negative sentiments and thus dragged down the oil price. Forex brokers and traders observed that in open Asian session, the black gold (Crude oil) extended its weakness and now it is trading at 49.6 per barrel.

According to the reports, IEA predicted that we may see a contraction in the oil consumption by 2.4M bpd to 83.4M bpd, which is the lowest level in last 5 year. Year 2009 is still expected to be seen as the global economic outlook sluggish and auto sales slumped (IEA also revised down global GDP growth to -1.4% from +0.5%). In developed nations the OECD demand is reduced by 760K bpd while that in developing countries the fall is seen for the first time since 1993 by 230K bpd.

Coming to the supply side, IEA expects non-OPEC supplies to witness a down fall of 360K bpd globally, of which 220K bpd is expected to be outside Brazil and the US. In addition, the report forecast over 1M bpd in investment cancellations or delays.

The Crude oil was closed stridently losing 2.11 dollars or 4 per to settle at $49.89. This move was momentous enough for all forex online brokers so it was no shock for them to see a cross below the 9 and 14 day MA. If we see technically crude oil is still in the range of $47.27 - $54.75 sideways which could only turn if we see a break on either side.