After drenching parts of Florida with over 8 inches of rain, Tropical Storm Barry continues to pick up speed as it heads for towards Louisiana. The storm remains at tropical intensity, but has a chance of strengthening into hurricane status.
Oil service companies continue to evacuate workers from offshore oilrigs in the Gulf of Mexico as the storm moves closer. Oil production has not been halted, but could be affected in the storm makes landfall near New Orleans as expected. 25 percent of U.S. oil production comes out of the Gulf of Mexico.
September Crude Oil Futures
Crude oil prices have been rallying off their July lows on lower oil inventory levels, but traders appear indifferent to Barry, as crude prices remain stuck at $27.71. Should the storm intensify, that would be the catalyst to complete the double bottom pattern, and possibly push crude oil above the two-month downtrend.
Chevron and Trasocean Sedco Daily Charts
Oil and oil service stocks are getting caught up in today's selling and Barry is helping to add a little downside. Both sectors are down over 1.4 percent, and two of Premier Investor's bearish plays, Chevron (CHV) and Transocean Sedco (RIG) are down over $1. Chevron has been in trouble since it broke below its ascending channel, but eventually bottomed at $85. CHV bounced as high as $92, but is once again heading lower after meeting resistance at the 50-dma and 50 percent retracement. With price now below support at $90, it could be down to the 200-dma at $87. Transocean Sedco hasn't done any better since it broke its yearlong up trend back in June. The stock has lost over $15 in one month, briefly pausing twice at support. The next solid support level looks like $25.