The oil market may continue its short-term correction in the near-term, but it’s also entering a support range between
$81.00 and $85.00/bbl. We think that the rate of decline will slow in the near-term, as some of the impulsive selling and weak longs exited the market during Monday’s session.
Oil prices may continue their short-term correction over the next few days, with support in WTI offered between $81.00 and $85.00/bbl. We think that the rate of decline will slow in the near-term, as some of the impulsive selling and weak longs have exited the market. A focus will be on the FOMC announcement today, but little change in policy is expected after the last meeting’s implementation of QE3.
The weak tone of yesterday’s session indicates that oil prices may move toward the lower end of the two-week consolidation near $89.00 in the near-term. Focus will be on DOE inventories and ADP payrolls today, which may offer modest pressure. Pressure could also come from a lack of investment moving into energy markets at the start of Q4, concerns over global growth, and a slow pace of reform in Spain and Greece. Support may be found from favorable car sales reported yesterday, and relative strength in the euro. We’d look for prices to test support at $88.95 (Sep 26th low) over the next few days.
