Crude Oil Fundamental Analysis October 2, 2012, Forecast

By FX Empire Analyst - James Hyerczyk
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Oversold conditions and a weaker U.S. Dollar could give crude oil futures a boost on Tuesday. Monday's stronger than expected U.S. PMI Manufacturing report helped boost prices on the perception of greater future demand, but the rally was not enough to change the trend to up. At this time, we are looking for a 2 to 3 day rally in a bear market. The PMI may provide a short-term relief for the market, but talk of a recession in Europe may put a lid on any sizable advances. 

With the main trend down and the fundamentals still showing too much supply, traders may treat the current rally as a new selling opportunity. Traders should be careful buying strength since retracements are inevitable. Until the market establishes a solid support base, look for a choppy, two-sided trade. The next major supply and demand report is due on Wednesday so don't expect traders to commit to either side of the market until this week's numbers are revealed. 

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