Crude breaks support - again

Just when the bulls thought that crude may have found some support, the sellers came out and smashed their hopes. While crude was a touch firmer in early trade, the gains were coming from a lower base. Yesterday, front-month WTI appeared to find some support around $77.50, having sliced below $80 at the end of last week. But it didn’t take too much effort for the sellers to push prices lower again, taking oil down a dollar below support. Could that mark some seller exhaustion? This kind of support break certainly has done recently, with prices seemingly set to continue lower, only to reverse sharply. Certainly, the downside pressure has been fairly relentless over the past three weeks. But as things stand, any upside move from here would look like a correction, at least initially, rather than a flip from the current downward trend. Yet stranger things have happened. While the charts suggest that a retest of the June low is quite likely, it’s difficult to know how much resolve the bears have currently. One thing seems reasonable to state, and that is that the current oil market isn’t forecasting a period of strong global economic growth.