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The light sweet crude market fell apart during the session on Wednesday as we fell to test the $85.50 level. The session closed out of the lows, and as such it looks like we are preparing to head much lower. At this point time we are now selling rallies, as soon as they show signs of failure. Until we get above the $90 handle, it is hard for us to envision buying this market.
The lows of $70 will more than likely be targeted, and you must understand that the $80 level will more than likely because some type of support as well. Nonetheless, it appears that the fundamentals have finally caught up with the oil markets as traders are willing to admit that there is much more oil out there than storage.