Crude oil has so far been in free-fall. Black gold broke down further on Wednesday after breaking key support on Tuesday. December Crude futures on NYMEX were down $0.95 or 1.1% to $85.72. The oil boys better watch this $85 level closely. If it does not hold, $80 oil is not out of the question.
Take a look at the ino.com chart going back six months (see below). The price level of $85 per barrel for WTI is a crucial level. When oil tanked in May you can see that $85 became the battleground area in June. When prices fell much under $83, they quickly went down to under $80 before stabilizing.
We would normally be excited that oil prices are sliding. The problem is that oil prices are sliding due to demand issues rather than supply issues. This is nothing more than a continued concern about the global economy. Watch trading in oil on Thursday because oil is at a critical juncture right now. If prices do not stabilize then $80 per barrel is certainly not out of the question.
JON C. OGG