The oil market has been a significant source of volatility this month as the uncertainty around the OPEC decision and economy dominate flows. Seasonally, October is also a weak month for crude with some believing the Mexico hedge is the reason why.

In any case, the price action today has mirrored the broader market with crude struggling. It was last down $3.44 to $85.86 after falling as low as $85.33. The Fibonacci 50% level from the OPEC rally is at $84.84 with the 61.8% level at $82.78.

WTI Oil H4 Chart – Will the 100 SMA Hold?

FED’s Bullard Commentingh Yesterday

• Appropriate that rates reach a range of 4.50-4.75% by year’s end with further hikes being ‘data dependent’
• September inflation warrants more frontloading
• Current inversion of the yield curve a ‘nominal inversion’ involving expected inflation, not an indicator of recession risk

Previously, Bullard was talking about a Q1 peak of around 4.5% but now he’s talking about 4.50-4.75% by year-end. Rates are at 3.00-3.25% currently so that’s 75-75 rather than 75-50 as most are anticipating. So this is a step in the hawkish direction but he’s a hawk so it’s not necessarily indicative of a shift from the core of the FOMC, but it’s a start. At the same time, he’s not talking about boosting the terminal rate so I’m not sure how much shifting around 25 bps from February to December matters.

US WTI Crude Oil Live Chart