Silver as an investment

Great Graphic: Oil is Looking Crude

marctomarket.com / by Marc Chandler / Sept 1, 2016

Oil has broken down further today. The ostensible trigger was the larger than expected build in US inventories. However, the price of oil has been trending lower since the beginning of last week. It appears that our skepticism of talk of an output freeze is gaining support. The Saudis have indicated that they do not see a need for action, while the Iranians have not yet returned output to pre-embargo levels.

This Great Graphic, created on Bloomberg, shows the recent run-up from early August and the more recent decline in the October light sweet crude oil futures contract. Our weekly technical view warned of risk toward $44.50. This level was tested today, and prices remain heavy. Today’s 3.75% drop means that the October contract has now retraced 50% of this month’s rally (~$44.65). The 200-day moving average is a little lower at $44.35.

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