Crude oil may fall to $50 a barrel as prices have risen too far from their 20-day moving average, said Masahiko Sato, a senior analyst at OvalNext Corp. Sato expects oil to drop to $43.83 in New York, a one-month low reached on April 21, should it decline below the $50 support level amid a lack of a recovery in demand. “Given a lack of bullish fundamental factors, the market is definitely overheated,” Sato from OvalNext, a commodities investment adviser, said by phone from Tokyo yesterday. “Prices that are 10 percent higher than the moving average are clearly showing sell signals.” The percentage of variance from the 20-day moving average line rose to 14 percent on May 8 and has been near 12 percent, he said. Prices often peak or reach a bottom when the rate is near 15 percent, according to Sato. Crude oil fell for a second day, declining as much as 41 cents, or 0.7 percent, to $57.61 a barrel on the New York Mercantile Exchange. Oil has risen more than 50 percent from about $32 a barrel reached in December as gains in the stock markets boost optimism of a recovery in the economy. Yesterday, the contract fell 83 cents, or 1.4 percent, to settle at $58.02 a barrel, the biggest decline since April 27. Oil’s 20-day moving average was at $52.67 a barrel yesterday, suggesting the settlement price was still 10 percent higher than the moving average figure. Analysts use moving averages to identify trends and find support and resistance levels for prices.

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