Over the last 24 hours, oil markets have seen a bloodbath.
Global commodity prices fell by almost 3% in the morning. The drop was a continuation of Tuesday’s 5% fall after disappointing US data raised fears about a possible economic recession. Oil bears are gaining strength from the weak US factory data, and the renewed concern about the US banking system. Further downside is possible ahead of today’s Fed decision.
It is wise to monitor the Energy Information Agency’s (EIA), which will release the US ISM data and numbers this afternoon. If reports confirm fears about the US economy, or EIA data indicates an increase in oil inventories this afternoon, bears could remain in control.
On the daily charts, WTI Crude is under extreme pressure. WTI continued to lose ground on Wednesday, with the bears pounding down at the $70 mark. A strong break and daily close below this point could open a path toward $67 and $64.33 – the lowest level hit this year. If $70 and $67 are reliable supports, then prices could experience a technical drop towards $74 prior to resuming their downtrend.
Brent has a similar situation. Prices are trading under the 50, 100 and…