Oil: Prices slumped to the lowest level since April 2016 - BBH

Analysts at BBH explain that the selling pressure on the June light sweet oil futures contract reached a crescendo before the weekend when prices slumped to the lowest level since April 2016 near $43.75. 

Key Quotes

“The contract rebounded smartly reaching almost $46.70.  This essentially fulfilled a 50% retracement objective of the last leg down in oil prices that began on April 28 just shy of the $50 a barrel level.  Above there, $47.50 is the 61.8% retracement, and the $47.75 is a 38.2% retracement of the decline since the April 12 high above $54.   The $49-$50 area may offer a more formidable hurdle. The speed of the recovery before the weekend warns of potential bullish divergences with the technical indicators, which did not confirm the new lows.  The RSI turned up, and the Slow Stochastics are set to turn.  MACDs are lagging.”