The outside day in oil muddles the picture

Technical Analysis

Author: Adam Button | oil

WIT down 68-cents to $48.87

It all started out so well for oil today as it climbed above $50 per barrel and shook off a surprise build in gasoline stockpiles in the weekly inventory report. The high was $50.22, which was the best level since July 31.

Then it all came apart.

Russia said it was considering boosting future production. Gazprom said it considered it "economic feasible" to resume drilling in mature fields when the OPEC/non-OPEC agreement expires.

At the same time, Saudi OPEC officials are trying to browbeat other members of the cartel into following the quotas. Iraq has been particularly incompliant.

The result of today's price move was a bearish outside day, or it least it's looking that way as trading winds down. That's particularly worrisome because it's coming as the US dollar weakens.

The saving grace for the moment is that a few bands of support extend down to $48.37. If that level holds, there still is a good case to stay long.

Update: And just like that, oil down $1.00 to $48.55 into settlement.