Oil intermarket: election jitters, OPEC and firm DXY weighing on demand

Oil has dropped sharply with WTI dipping below the $47 handle, marking the lowest levels and close since Sept. 28.

Oil came under pressure again as markets lose confidence in the idea that major crude producers can make an accord to cut production. At the same time, the FBI announcements at the close last week of a fresh probe into Hillary Clinton's emails stock market sentiment turned negative, offering a general risk-off tone to markets albeit with the DXY bouncing back while Clinton's poll numbers remained strong on Monday. Meanwhile, stocks were drifting, despite 3% drop in oil and mixed US data.

Oil dropped from $49.00WTI to $46.96 the low while the S&P 500 was a drift lower from 2136 the high to 2122 the low, closing at 2127. The US30YT was also in decline from 2.62 to 2.58 with little change in the DXY, while the US 10yr treasury yields ranged between 1.82% and 1.85%, 2yr yields between 0.84% and 0.86% while the FOMC meeting gets underway. Technically, WTI is now through a key level being $48.00 and its easy drop through the $47 handle exposes risk to $43.00 and late Sep lows. $52 remains key psychological target.