West Texas Intermediate (WTI) futures plunged Tuesday, erasing gains the benchmark had largely sustained during the previous four trading days. WTI lost almost $2 to settle at $57.60 per barrel. As the remnants of Hurricane Barry continued to move inland, traders’ attention turned to more longstanding concerns about the oil market. As Bloomberg reported earlier this morning, bearish matters such as increasing worldwide oil inventories, waning oil demand and a slowdown in China’s economic growth contributed to the decline.
WTI settled below the psychologically important $60-mark yesterday, tanking on high volume, and closing back below the 200-period moving average, forming a black candle bearish pattern. Prices are trading close to the key technical support level at 56.30 (S1) and very close to July's lows at 56.04. Downside momentum might accelerate should crude mark new lows for the month.
Support: 56.30 / 56.04
Resistance: 58.60/ 59.00