Crude Oil Corrective Pullback

WTI Crude price action created an aggressive pull-back to 90.96 levels from the current high of 100.42. On Monday last week the price dropped by $4.40 in the space of 3-5 minutes during the US afternoon trading hours.

The Market was buzzing with the speculation that SPR (Strategic Petroleum Reserves in US) could be released to increase the supply and soften the price. However that was promptly denied and the unusual price action was attributed to the expiry of September delivery contract and a rollover to a more frequently traded October contract. The current low was also a retest of 38.2% Fib. Retracement from June lows to the current September high of 100.42. The current support on the downside is located at 88.64 which is 50% Fib Retracement followed by 85.83. Alternatively Resistance on the upside could be located at 95.74 (20 Day SMA) followed by 96.47.

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