Originally published by AxiTrader
Quick Recap
Crude Oil fell another 2.5% last night with WTI sitting at $45.51 this morning. That's broken a key level - the uptrend from the $26 lows this year. That could usher in the next wave of selling
What You need to Know
Oil has been falling because traders are skeptical that the deal can be done.
So news overnight that the special exemption nations of Libya, Nigeria, and Iran increased production by 400,000 barrels a day and Iraq kicked the tin with a 50,000 increase just serves to underline the fact that it falls to the Saudis to take the heavy load if any production cut is actually going to happen at the November 30 meeting.
Add in the ridiculously large - biggest on record - rise in EIA inventories of 14.42 million barrels and traders had every excuse they need to thump oil lower.
That combination overnight has now taken WTI crude below the uptrend from the 2016 lows. This break suggests that a garden variety 38.2% retracement of the move is in train.
That would take WTI back to $41 a barrel.
Here's a simple chart of the uptrend break: