October WTI crude oil has started the trading week on a moderately bearish note. Price is off 25 cents per barrel, beneath the $69.00 handle. Weakness has been the rule since last Wednesday’s test of $71.00. For now, it appears traders are beginning to respect seasonality and potentially waning demand for crude.

The big news items facing the energy markets are sanctions impacting Iran and fallout from U.S./China trade war tensions. Supplies from Iran are projected to fall significantly very soon and most see U.S./China tariff escalations as being a catalyst for falling global oil demand.

October WTI Crude Oil Futures

October WTI futures are trading at a key technical level on the daily chart. Price is testing downside support, but remains in bullish territory.

Today has brought a tight 119 tick range with a majority of trade occurring near the $69.00 area. Here are the levels to watch for the remainder of the session:

• Support(1): Bollinger MP, $68.48
• Support(2): Daily SMA, $68.47

Overview: The Baker Hughes Rig count from Friday came in at 867, up seven from the previous week. This is not a huge deal, but will be a trend to watch as we enter the fall/winter season. Positive rig growth indicates rising sectoral investment and expectations of pricing stability.

Last week’s surprise draws on inventory prompted a Wednesday short-term rally. Since then, bears have taken control of this market. If price breaks beneath the daily support levels, we will likely be in for a test of the 62% retracement at $66.76 by Friday’s closing bell.