After hitting its swing-high medium-term tension zone at the beginning of this month, crude oil turned lower, commencing its decline into its medium-term low.

Below is the early October chart that you have seen before.

And here is the updated one showing how oil has reacted to the tension zone.

As you can see, “tension zones” are very powerful predictors of medium-term turning points in markets, and with oil leaving its last swing high tension zone, this tells us that it has officially completed its rally that commenced in early August and is now well on its way down towards its next medium-term low.

The details about the next tension zone at which crude oil should be bottoming (both in terms of price and time) is available to our medium-term subscribers. If you are interested in becoming one, you can learn more here.

Coming back to crude oil’s decline, what should further fuel this decline when the markets open in Asia tonight is that talks among OPEC members, which took place in Vienna over this weekend to work out a plan to curtail oil output, failed to achieve their desired outcome mainly due to demands from Iraq and Iran to be excluded from reduced production quotas. This is a bad omen for the upcoming OPEC meeting that is scheduled to take place at the end of November and is well in line with our current bearish stance on oil.

Be careful though, because between now and then, the forecast shows very clearly that we will be hearing news that will falsely raise hope about the prospects of a production cap, which will also raise oil prices in the interim but, after the meeting concludes, we expect those talks to break down and for prices to drop sharply lower.