The West Texas Intermediate Crude Oil market has fallen hard during the Friday session, as we continue to grind back and forth. It’s interesting to see how this market is behaving, because the cutting of 2 million barrels of oil per day by OPEC should have shot the market higher, but quite frankly I think the market is starting to focus more on the idea of an economy slowing down quite drastically.
Global Economy Slowdown Affecting the Crude Oil Price
That’s going to be the issue with trading crude oil at the moment, because there are so many wild fluctuations and what people are focusing on during any given day. On some days, it’s all about the fact that oil is being cut back, but on other days it’s all about the fact that nobody needs it. The market is extraordinarily volatile and erratic at the moment, so the fact that volatility has picked up makes our jobs much more difficult. That being said, you could make an argument for a bit of a bullish flag trying to be formed, which if we break above the $90 level could be confirmed. The 200-Day EMA sits just above there as well, which obviously causes people to pay attention as well. Also the US dollar is going to be a drag on the oil market, as there is generally a negative correlation, but there does not have to be.
WTI Crude Oil Trading Predictions Today
- The $85 level underneath is significant support, so if we were to break down below there, then maybe the market is looking toward $82.50 level, and then eventually the $80 level.
- Looking at this crude oil chart, it seems as if we are at an inflection point, so I would step back and let the market make an impulsive move to follow.
- I do believe that something is about to break in the financial system, it probably won’t have anything to do with oil directly, when things like that happen, everything moves, and sometimes not in the way you expect them to.
In this market, the most important thing you can do is keep your position size reasonable, because the volatility is only going to be a major danger going forward, and probably only gets worse as we continue to see player fear in the markets and of course people trying to figure out where we are going next and what is a very noisy and chaotic environment.
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