Crude oil is getting smoked

Crude oil is getting smoked.

On Wednesday afternoon, West Texas Intermediate crude oil futures in New York fell more than 3% to as low as $US44.47 per barrel.

Earlier, the Energy Information Admistration released its latest short-term energy outlook. The EIA estimated that US oil production fell by 140,000 barrels in August compared to the previous month. It pegged its WTI forecast at $US49 per barrel for 2015, and $US44 per barrel next year.

It also noted that the current value of futures and options contracts that expire in December indicate that the market expects oil prices anywhere between $US32 and $US73 per barrel in December.

On Thursday, the EIA will release its weekly numbers on crude inventories.

Here’s a chart showing the move lower in WTI today:

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