WTI Crude Futures: Downside Pressure Mounting

WTI Crude Futures (Dec) has dropped more than 3% so far in October, after plunging 5.6% last month...

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WTI Crude Futures (Dec) has dropped more than 3% so far in October, after plunging 5.6% last month. 

The return of supply has piled pressure on oil prices, as oil field services company Baker Hughes' data showed that U.S. rotary rig count has increased to 287 as of October 23, since marking a historical low of 244 in mid-August.

Meanwhile, market sentiment was dampened by the stall in talks over a new U.S. stimulus package, and investors were also concerned with the spike in new COVID-19 cases in the U.S. and Europe.

From a technical point of view, WTI Crude Futures' (Dec) pressure is mounting as shown on the daily chart. Previously, it has broken below a bearish rising wedge pattern and is now forming a rounding top pattern. The level at $41.90 might be considered as the nearest resistance, while the 1st and 2nd support are expected to be located at $35.70 and $33.55 respectively.

Source: Gain Capital, TradingView

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