The WTI Crude Oil markets fell during the bulk of the session on Thursday, testing the $99 handle. This is an area where I expect to see a significant amount of support, so the fact that we bounced a little bit towards the end of the day really doesn’t surprise me much. However, the candle isn’t quite a hammer, so I think we could drift a little bit lower during the session. On top of that, it is nonfarm payroll Friday, so that will certainly have an effect on perceived demand of crude oil in general.
Going forward, it is not until we get below the $97 level that I am comfortable shorting this market. Yes, I see that we have sold off rather stringently, but at the end of the day the markets appear to be supported enough to be leery of teen to bearish for any length of time.
Range bound?
It is possible that we are essentially trying to form some type of range. I can make an argument for $97 being the bottom of that range, all the $105 level on the top could be the upper boundary of it. That would make sense, as the oil markets do like to consolidate for long periods of time occasionally. On top of that, we are heading towards the summer and that tends to be a little less active as far as the oil markets are concerned. Generally, we write is ready for summer driving season in Europe and the United States, and just kind of meander around during the warm months. It’s very possible that is what we are seeing. Nonetheless, I am a little bit more bullish than bearish anyway, so I do feel better buying supportive candles.
If we did break down below the $97 level, I think this market could go as low as $92 without too many issues. Granted, there would be a hiccup here and there, but at the end of the day would be significant break of support.
