Oil fell into a third leg of decline as expected, but with very sharp price action. We know that fast and strongest moves occur in wave three situation of an impulse, which will be confirmed by a base channel break like in our case (circled zone). As such, we are very confident that oil prices are now headed even lower, definitely below July 25 swing. Ideally wave (iii) will slow down at 86.80 and cause a temporary bounce into wave (iv), before another sell-off. Short-term invalidation level is at 89.20 as wave (iv) must not trade into a territory of a wave (iv).