October crude oil started the week trading higher but couldn’t hold the highs of 68.52, closing lower on Monday at 67.53. Supply side concerns with violence in Iran and Venezuela’s economic turmoil is providing some support here in the near term. Demand from China remains strong but traditionally, fall shows a weakening demand from the US after the strong summer driving season. In the US, the market will be watching Hurricane Florence as its current path is projecting a disruption of refinery and pipeline operations. In the short-term October crude has traded off the upper end of the sideways channel at 71.43. Momentum studies are approaching over-sold levels and the current trend remains to the downside. The next objective lower is at 65.05 if the market breaks last week’s low of 66.86. Resistance comes in at 68.52 and 71.43. Barring any disruptions on the supply side look for weakening demand to pressure the market and the trend lower to continue.
Crude Oil Oct ’18 Daily Chart