WTI Crude Oil Crashes Under $40.00

Just like the meltdown in U.S. equities, WTI crude oil is diving deep into bearish territory. At press time (about 1:30 PM EST), October WTI is buying and selling beneath $40.00, off practically 4% on the session. Whereas the transfer falls in keeping with late-summer seasonality, it’s nonetheless throwing energies merchants for a loop.

On the information entrance, the Baker-Hughes U.S. Oil Rig Rely is in. The determine was up one rig week-over-week, coming in at 181 in comparison with final Friday’s 180. The modest acquire is a shock amid widespread power bankruptcies and torpid WTI pricing. One factor is for sure ― there will probably be little or no U.S. drilling with sub-$40.00 WTI going into fall/winter seasonality.

The strain within the markets immediately is palpable. Equities indices are closing in on corrective territory and commodities are struggling. About the one winner immediately is the Buck. Other than lagging vs the Canadian greenback, the USD has posted respectable beneficial properties throughout the majors. Maybe the current bounce within the USD is bringing weak spot to crude oil and commodity pricing. At this level, solely time will inform.

A Tough Week For WTI Crude Oil

Crude oil has had a troublesome first week of September. October WTI is down greater than 8%. Whereas not fairly the plunge of final April, the motion has been decisively bearish.

Going into subsequent week’s commerce, there’s one stage on my radar for October WTI:

• Help(1): 38% Present Wave Retracement, $36.35

Overview: Proper now, the image doesn’t look good for crude oil. Costs are exhibiting weak spot as the height demand summer season season is fading. The actual fact is, because the sell-off of 2018 international crude oil is in a long-term bearish development. Except we see a serious game-changer from OPEC+ or armed battle, WTI costs are doubtless headed for the $30.00-$35.00 vary as fall approaches.