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October WTI Crude Oil Futures: Trend Day Down

Shain Vernier•Monday, August 28, 2017•2 min read

October WTI crude oil futures are under siege. Intraday trading has shown heavy selling throughout the U.S. session. Currently, October WTI is down over $1.50 on heavy volume.

As my colleagues Rowan, Arslan and Skerdian mentioned earlier, the impact of Hurricane Harvey is being felt throughout the U.S. Gulf Coast. Forty-five percent of all U.S. refining is located near the path of the storm. ConocoPhillips, ExxonMobil, and Shell have shut down many assets with no exact timeline for a restart.

Trading during times of extreme fundamentals can be a challenge. It is crucial to stay abreast of changing news items. Undoubtedly, this week’s WTI inventory cycle will be extra important to traders attempting to account for Harvey’s long-term impact.

 

Technicals

The intrasession trade of October WTI crude is overwhelmingly bearish, a full-blown trend day down. We are currently trading around $46.25 near session lows.

 

WTI Daily ChartWTI Crude Oil Futures, Daily Chart

Right now, looking for support levels is tough on the shorter time frames. However, there are a few levels from the weekly and daily charts:

  • Lower Bollinger Band on the daily chart at $46.29

  • 62% of Current Wave on the weekly chart at $45.52

  • Key round number at $45.00

  • 78% of current wave on the weekly at $44.25

Moving Forward: This week’s inventory cycle is going to bring even more volume to this hot market. The long-term trend for WTI crude is bearish, as it has been for the past several years. There just isn’t enough institutional money coming into this market to drive it north.

Sometimes technical analysis can be relatively simple. This market is comfortable trading from $45.00 to $50.00. I will be looking for a test of $45.50 and $45.00 relatively soon.

Ultimately, this week’s inventory cycle in the wake of Harvey will determine where we are headed for the rest of August and early September.

 
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ABOUT THE AUTHOR See More
Shain Vernier
US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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