The near-term outlook for oil is bearish at this time after it declined by $11 per barrel over the past five weeks. The chart of the basis October light crude on the NYMEX shows a definite downtrend. After showing a bearish double top in July (top one) and August (top two) in which the October contract broke above $80 to an intraday high of $80.37, prices have been on a free fall and fell to the $64 level on September 11.

 The near-term technical picture is quite bearish and the current short-term downtrend will stay in place unless we see a trend reversal. The October oil has fallen below key support at the 20- day moving average at $70.26 as well as the 200-day moving average at $69.98. The Relative Strength is extremely weak and points to more downside moves, albeit we could see some near- term buying support as the October oil is extremely oversold.

 Driving down oil prices has been a combination of some stability in world tensions in the Middle East and North Korea, combined with adequate production and declining demand as the busy summer season ends. Also, the lack of a major hurricane impacting oil refineries in Texas has helped to drive prices lower.

 Now, on the supply side, there is news that OPEC may leave its current production unchanged at 28 million barrels per day, a level maintained since July 2005. Yet there is speculation that major producer Saudi Arabia may ignore OPEC and cut its production to try to stop the decline in oil prices.

 It is clear the current trend is down. The climate for oil is not price supportive, but we all know that this could easily change. For the stock market, retailers could benefit as less disposable income is required for gasoline expenses. Watch if this materializes going forward. On the corporate side, transportation stocks such as airlines and delivery services will benefit, as well as other companies where energy is a key cost.