Today might be an excellent day to fill up your tank, as crude light just nailed our Oct 14 target of 64.38 [see: Oct 14 Update on Oil.]
As we reiterated in our Nov 13 update, the .618 Fib level coincides with a long-term channel bottom dating back to 1999. In other words — major support that should produce a major bounce.
Catalysts abound, but the most obvious is that US oil companies are being hit hard. Earnings are obviously being impacted. And, a major credit event is on deck if we don’t see a strong reversal. In other words, TPTB need oil to strengthen.
Aside from that, take a look around MENA. It is, and has been, one headline away from a fear-driven spike in prices that could easily outweigh OPEC’s inaction last week.
Look for at least a $10 move back to the .500 Fib at 74. The 10-day and 20-day moving averages are currently at 72 and 75.