Oil: technical tone is soft - BBH

Light sweet crude oil for November delivered slumped 4.6% over the past week, the largest fall in five months as the technical tone appears to be soft, according to analysts at BBH.  

Key Quotes

“The approaching storm (Nate) was already spurring the closure of platforms and refiners.  In addition, it appears OPEC output increased last month.  Also, some reports indicated that there had been increased producer hedge-related selling.  The price action of the November futures contract appears to have traced out a possible head and shoulders topping pattern that project to $47.”

“The technical tone is soft, with the five-day average crossing below the 20-day average for the first time in a month. The technical indicators are also trending lower.  The $48.70 area may offer initial support.  It corresponds to a 61.8% retracement of the rally since the end of August.”