Following this morning’s weaker than expected ISM Services number, the front month November WTI crude oil contract has made fresh lows as the market has filled the gap from the Saudi attacks recently and is testing trendline support from last December’s lows and the lows from early August.
The drop over the past couple weeks has been severe from the extremes of the attack as stochastics and RSI reach oversold levels and the market has only closed up, albeit negligibly, 2 of the past 17 days! While the spike high was supply related, the market does operate at enough of an oversupply to necessitate frequent production cuts. The market has also focused on the demand side as outside markets such as equities have also been weak.
Moving forward, market participants may monitor if the $51.50 level is closed below today as well as the trendline pictured below. Tomorrow will also feature the jobs number which could also be a catalyst for price action, in addition to further developments for production and supply, such as geopolitical changes around Iran, Saudi Arabia, OPEC, OPEC+, etc.