The crude oil market remains weak as the October 14 contract yesterday fell to a new spot price low for 2014. In the overnight session, selling has continued dropping the market to the lowest level it has traded on a spot contract basis since May 2013.
After stalling out below 10 day moving average resistance on Tuesday, the October contract was well sold throughout yesterday’s session losing 1.08 to settle at 91.67.
Selling overnight has dropped the October contract to a 90.43 overnight low. There should be good buying interest down to the 2014 contract low of 88.69 set in January.
Former 91.80 daily low support broken yesterday now becomes the first area of resistance followed by 92.50. Longer term resistance is the 10 day moving average currently at 94.35.
Hedge funds last week were net long over 300,000 crude oil contracts according to last Friday’s Commitment of Trader’s report. Funds were record long 455,000+ contracts on the June highs. Fund liquidation may be part of the reason for recent weakness as the market trades down to a new spot price low for 2014.
Technical Indicators: Moving Average Alignment – Bearish
Long Term Trend Following Index – Bearish
Short Term Trend Following Index - Bearish
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