November crude oil had a gap lower open Tuesday evening and has continued to decline during the overnight and initial morning hours to the lowest level since August 3rd. Gains in the US dollar and weakness in global equity markets have fostered a risk-off attitude. A 24 hour workers' strike in Greece, anti-austerity protests in Spain and growing concerns that recent central bank measures will do little to fuel economic growth are key forces weighing on the crude oil demand outlook. Mounting tensions between China and Japan, as well as a deteriorating situation in Europe have taken some of the focus away from Iran this morning. However, tensions in the Middle East are far from resolved and are likely to limit downside action in the crude oil market. It is also possible that private industry data released late Tuesday that showed a smaller than expected build in US crude supplies could be limiting the slide in November crude oil. Expectations for today's EIA report are for a build in the range of 1.5 million barrels, which compares to the five year average build for this week of the year of 1.2 million barrels. November crude oil broke below support at $90.96, which leaves the potential for a deeper slide to $88.08. However, short term oversold momentum indicators, below average trading volume during yesterday's outside day reversal and a steep 10% downdraft from the mid-September peak of $100.73 warrant caution. Psychological support in November crude oil comes in at $90.00.
 

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