Please attribute the following commentary to Jeffrey Halley, senior market analyst at OANDA. For direct comment, call Jeffrey at +65 9457 1849 or email firstname.lastname@example.org.The rout continued in crude as both WTI and Brent futures fell by about 4% overnight.
The straight line nature and aggressiveness of the move down smacks of long position liquidation to me. Clearly a lot of the record speculative long positioning built up in crude futures over the last few weeks, has hit its pain threshold and pressed the sell button.
The talk of no concrete details from OPEC is more a case of fitting the news to the price action then vice versa. We expect still more pain to come.
WTI has support in the $46.00 a barrel area for now. Speculative longs will hoping for some relief in the form of tonight's US API Inventory Figures. One suspects though, that any rally will be a short lived dead cat bounce.