WTI Oil futures collapse to a fresh three-month low [Video]
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WTI futures decline sharply below the 200-day SMA.
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Drop to the lowest level since July 20, but find their feet at the 75.00 handle.
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Momentum indicators touch oversold levels, hinting at potential bounce.
![WTI Oil futures collapse to a fresh three-month low [Video]](https://editorial.fxstreet.com/images/Markets/Commodities/Energy/Oil/crude-oil-sign-on-well-tank-21046779_XtraLarge.jpg)
WTI oil futures (December delivery) have been on the retreat since their October peak of 89.85, breaking aggressively below historical support zones. On Tuesday, the price dropped more than 4.5%, sliding beneath the crucial 200-day simple moving average (SMA) before recording a fresh three-month low on the following day.
Should selling pressures persist, the price could revisit the recent three-month bottom of 75.00, which also served as resistance in June. Failing to halt there, oil futures could descend towards 72.60, a level that held its ground both in January and February of 2023. A break below that zone could set the stage for the triple bottom of 67.00.
On the flipside, if the price attempts to stage a recovery, initial advances could encounter resistance at the August support of 77.60, which coincides with the 200-day SMA. Violating that territory, oil could challenge the 80.20 hurdle. Even higher, the April peak of 83.40 may prove to be a tough obstacle for the bulls to overcome.
In brief, WTI oil futures remain under relentless downside pressure, recording consecutive lower lows. However, traders should not rule out a bounce to the upside as the short-term oscillators are dangerously approaching oversold conditions.
Author
Stefanos joined XM as a Junior Investment Analyst in September 2021. He conducts daily market research on the currency, commodity and equity markets, from a fundamental and a technical perspective.
