Breaking News
Investing Pro 0
Cyber Monday SALE: Up to 54% OFF InvestingPro+ CLAIM OFFER

Oil Keeps Tumbling as Bears Eye Low $70s for U.S. Crude

Commodities Sep 26, 2022 03:27PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
LCO
+0.09%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CL
+2.16%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DX
+0.09%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Barani Krishnan

Investing.com -- The selloff in oil showed no signs of slowing on Monday as bears in control of the market doubled down on their bid to get U.S. crude to the low $70s and possibly beneath.

New York-traded West Texas Intermediate, which serves as the U.S. crude benchmark, settled at $76.71 a barrel, down $2.03, or 2.6%, on the day, and 40% lower from its March high of around $130. 

With September trading due to end this week, WTI is also down 14% so far on the month. Aside from that, it is headed for its first losing quarter since 2020, with a decline of 27% as of Monday for the July-through-September period.

Brent, the London-traded global benchmark for oil, settled at $84.06, down $2.09, or 2.4%, on the day and some 40% off from its March peak of almost $140. Brent is also 13% lower on the month, and off 28% for the third quarter. 

Investors have fled from risk across markets as global central banks, led by the U.S. Federal  Reserve, embark on the most aggressive rate hikes in four decades to fight inflation.

The Fed has raised rates by 300 points this year and plans to add another 125 by December, after starting from a base of just 25 in February.

Its action has sent the U.S. currency flying, with the Dollar Index, pitted against the euro and five other rivals, hitting one continuous 20-year high after another. A stronger dollar is typically bad for commodities priced in dollars, such as crude, as it makes them costlier for anyone using the euro and other currencies.

Monday’s peak of 114.42 for the so-called DX trading symbol in the dollar was the highest since its May 2002 high of 115.47.

While the rate hikes and the recession they might bring to the global economy have led the risk aversion across markets, the bears in control of oil were also looking at technical indicators that could heighten the selloff, said analysts.

“The catalyst might be economic fundamentals but there’s certainly a target to it, and that target is absolutely technical,” said Sunil Kumar Dixit, chief technical strategist at SKCharting.com. “For now, it’s $72 WTI and, if that breaks, it will be $63.”

Dixit breaks down his reading to this: With little respite for the Dollar Index’s climb, downward momentum builds on WTI to breach its 200-month Simple Moving Average of $72, before the more important test of the 50-month Exponential Moving Average of $63.

Oil Keeps Tumbling as Bears Eye Low $70s for U.S. Crude
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
hiiah Huuah
hiiah Huuah Sep 26, 2022 6:03PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Short squeeze coming soon
Son Yay
Son Yay Sep 26, 2022 3:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Putina and MbS won't be laughing and brohugging anymore now
Sami Khan
Sami Khan Sep 26, 2022 3:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
wer my many
Ndrew Wen
Ndrew Wen Sep 26, 2022 3:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
They are not bro. They do price war before.
Baer Markit
Baer Markit Sep 26, 2022 3:16PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
$53
Show previous replies (12)
Ndrew Wen
Ndrew Wen Sep 26, 2022 3:16PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Barani Krishnan For me, im not seeing any benefits here. So it doesnt work at all.
Barani Krishnan
Barani Krishnan Sep 26, 2022 3:16PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Simply because you don't see it, it doesn't mean it doesn't exist.
Barani Krishnan
Barani Krishnan Sep 26, 2022 3:16PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Yes, that I'm aware of, thanks. At the moment, much of the heat is on the US benchmark; hence the inordinate attention on it.
Ndrew Wen
Ndrew Wen Sep 26, 2022 3:16PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Stephen Fa yes, brent is globally.
Ndrew Wen
Ndrew Wen Sep 26, 2022 3:16PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Barani Krishnan So is it possible if mbs angry with the prices and stubornly make oil goes to $10 like price war before?
Hal Hildebrand
Hal Hildebrand Sep 26, 2022 3:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
crude doesn't have as much of impact at the pump as does refining capacity and demand does... everyone know this... But crude runs the world economy, so if no crude, no economy...
Barani Krishnan
Barani Krishnan Sep 26, 2022 3:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
True. It just got overpriced, that's all.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email