Oil Futures Unstable Above $80
Oil futures slid to one-week lows this afternoon, falling below the $80 per barrel level as production resumed in the Gulf of Mexico after a storm threatened to move in. Traders also believe the recent run at new all-time highs was overdone, especially with concerns about the health of the U.S. economy given the turmoil surrounding the U.S. housing market. Traders noted a rash of sell-stops were triggered once the November contract fell through psychological support at $80 per barrel. Despite today’s sharp decline, prices may rebound tomorrow, especially if the weekly EIA energy stocks report shows a larger-than-expected drawdown in U.S. crude inventories last week. Current estimates are for Oil stocks to have declined by 2.2 million barrels last week. $77.30 is seen as the next support point for November Oil, with resistance found at $80.55. November Crude Oil closed at $79.53, down $1.42.
Mike Zarembski, Senior Commodity Analyst
