The price of spot Crude Oil declined sharply yesterday as traders were concerned that overly strong economic data may lead the Federal Reserve to raise interest rates. Economic data from the previous week was stronger than expected for new home sales and durable goods. A rise in the interest rate the Fed charges banks could cause the U.S. economy to slow, thereby reducing future demand for Crude Oil.
Spot Crude Oil prices finished the day at $84.15, from an opening price of $85.43. The price found support near the 83.90 price level.
The Federal Reserve Open Market Committee (FOMC) is due to meet on Tuesday and Wednesday. On Wednesday the FOMC will release its rate decision and accompanying rate statement. Any change to the wording in the Fed's statement could be a negative for the price of spot Crude Oil.
The price of spot Crude Oil appears to be in a consolidation pattern as of recent. A bullish flag pattern has formed on the daily chart with the top of the pattern beginning at the price high of $87. A break of this price could propel the price of spot Crude Oil towards the $94 range.