The WTI Crude Oil markets went back and forth during the course of the day on Wednesday, showing the $96.50 level to be supportive yet again. We have been consolidating in this general vicinity, so it’s not a surprise that we continue to hang about. I see resistance at the $98.50 level as well, so I think that short-term traders will continue to push this market around in the meantime. I think that the short-term traders will continue to bounce back and forth between these two levels, and as a result it’s probably difficult to place a trade for more than a few hours.
If we do get a break above the $98.50 level, I think at that point in time the market goes to the $100.00 level. That being the case, the market would be bullish at that point in time, and I would be a buyer. Ultimately though, I also have to look at the downside which is the $96.50 handle. In that region, a break down below would send the market looking for the $95.00 level, the next major support level based upon not only the large round number, binds longer-term charts as well.
Summertime trading can be very sideways.
Summertime trading can be very difficult to deal with in the oil markets, as most of the large traders are probably away from the pits right now. However, with the geopolitical risks out there, the oil markets could surprise quite a few people and make a significant move during the course of the month of August, something that is not typical at all.
Keep an eye on events in the Ukraine, as well as Iraq as they can have drastic effects on the oil markets as well. The value the US dollar of course will be important as well, considering that the market is treated in that currency. A strengthening US dollar can sometimes work against the value of oil, so that of course could be a factor. In the meantime, I am staying away from this market, but recognize a break out in either direction does in fact offer a trading opportunity.