This morning’s IEA supply report has suggested demand would remains weak into 2017, and with a downward revision to its demand forecast, this has added a bearish tone to oil prices once again, with the WTI contract for October trading lower at $45.27 at time of writing. The IEA see the forecast for 2016 falling by 100k bpd to 1.3 mln bpd.

From a technical perspective, the bearish sentiment was set in train last week on the daily chart with the two bar revesal centred on the volume point of control and confirmed with a pivot high, and whilst yesterday’s up candle suggested some positivity for oil (USO, quote), this morning’s news has driven prices lower once again as they test the support level at $45.42 per barrel.

This held in yesterday’s oil trading session, but with the gapped down open, negative news, and the volume point of control weighing overhead, crude oil remains another commodity under pressure. Indeed the trend monitor describes the current picture perfectly with the transitional colors reflecting the current consolidation phase. Nevertheless, should the support platform now being tested be breached.

We could see a deeper move to retest the $43 per barrel area in due course. Much will depend on the FED meeting next week, and should rates be held, as now widely expected, this is likely to provide some respite for oil, along with other commodities in the sector.

Anna Coulling is a trader with over 16 years’ experience and founder of AnnaCoulling.com