The impact of Hurricane Laura’s production shutdown is now being felt. Earlier this morning, the U.S. Energy Information Agency (EIA) reported a massive -9.362 million barrel decline in oil stocks on hand. Much of the downturn may be attributed to last week’s Category 4 storm that ceased production in the Gulf Coast region.

However, despite the drop in supplies, October WTI crude oil is trading much lower. Prices are off by more than $1.00 per barrel amid lackluster volumes. As the Labor Day weekend quickly approaches, it looks like we may have already seen the summertime peak for crude oil.

EIA Reports Extraordinary Week-Over-Week Change

This week’s oil inventories cycle is in the books. Both the API and EIA figures fell dramatically in the wake of Hurricane Laura. Let’s dig into the figures:

Event                                      Actual               Projected           Previous

API Crude Oil Stocks            -6.360M                 NA                    -4.524M

EIA Crude Oil Stocks            -9.362M              -1.887M               -4.689M

It’s difficult to overstate how weak WTI pricing has been over the past seven sessions. In the midst of a hurricane and slumping EIA and API supply figures, October WTI is trending toward the bear. While we will learn more in the coming weeks, it may be that WTI is already headed into fall/winter seasonality.

October WTI Plunges Toward $41.00

As you can see below, October WTI crude oil has traded sideways for the majority of the summer. Sentiment has been moderately bullish as prices have stagnated within March’s GAP area.

For the rest of the week, there is one support level to watch:

• Support(1): Bollinger MP, $40.64

Bottom Line: If we see October WTI continue to slide, a long trade will come into play. Until Friday’s closing bell, I’ll have buy orders in the queue from $40.67. With an initial stop loss at $40.42, this trade produces 25 ticks on a standard 1:1 risk vs reward ratio.