The energy complex has gone from bad to worse this afternoon as WTI collapses to a $46 handle and Permian crude below $40 amid economic growth (demand) anxiety and surging supplies. A U.S. government report Monday forecast surging shale-oil production, adding to worries about a glut; and in Moscow, Russian Energy Minister Alexander Novak said production is rising, although the country is preparing to implement output curbs to conform with an OPEC+ accord. “Oil has gotten caught up in all the panic you’re seeing,” said Bill O’Grady,chief market strategist at Confluence Investment Management LLC in St. Louis. “This is all about fears of a recession. It’s risk-off everywhere.” But, as BMO's Russ Visch notes, it's not over. Crude oil (WTI contract) has rectified the deepest oversold reading in more than 30 years by doing nothing more than trade sideways for the past 3-4 weeks. That's not healthy. A close below support at $49.41 would signal a resumption of the downtrend and open a new swing target of $44.27. The next major support level below that is $42.25. We noted a few weeks ago that crude oil likely won’t bottom until equity markets do similar to what occurred in 2011 and again in 2015. So far it’s living up to its end of the deal.