Dec. 21 (UPI) -- Crude oil prices fell Friday morning as the selloff extended and traders tested support levels amid widespread views that the market is oversupplied and that economic growth may slow.
West Texas Intermediate future prices fell 1.2 percent to $45.33 per barrel as of 8:33 a.m. EST while Brent crude oil futures declined 2.2 percent to $53.43 per barrel as of the same time.
WTI futures have declined sharply since trading at $52.28 per barrel on December 13 and from $76.41 per barrel on October 3, mostly on concerns that the oil market is oversupplied, but also as investors worry that the future economic outlook is not certain.
"WTI crude oil is still in selloff mode and has tumbled down to a key support level visible on the long-term charts," according to Katrina Ang, an analyst at Fxdailyreport.com, adding that the "price has fallen below both moving averages as confirmation that bearish pressure is kicking into high gear."
"RSI is already indicating oversold conditions, though," she said. RSI, or relative strength index, is a technical indicator used to analyze markets. This could eventually lead to a reverse of the downward trend.
Crude oil markets reached peak high levels for the year in early October as the market anticipated supply reductions resulting from nuclear related-sanctions against Iran that the United States said in May it would put into effect on November 5.
Prices rose in the second half of October as oil producing nations increased production to take advantage of higher prices, pretending to move in to fill the potential disruption of Iran, which as of April exported some 2.8 million barrels per day. There was uncertainty as to how much of that could be disrupted.
However, on November 5 the United States suddenly announced waivers to several buyers of Iranian oil, changing whatever concern was left about the market being short to new concerns that the market was oversupplied.
OPEC announced a production cut of 1.2 million barrels per day on December 7, in a bid to prop-up prices, but that didn't work in part as there are doubts that the cartel has the capacity to enforce the accord.
In December, renewed concerns about an economic slowdown due to trade tariff exchanges and trade disagreements between the U.S. and China contributed to the negative market sentiment. The increase earlier this week of benchmark interest rates by the U.S. Federal Reserve also contributed to economic slowdown concerns.