- The light sweet crude oil market has rallied initially to kick off the trading session on Tuesday, only to find selling pressure and resistance.
- The $62 level has offered a bit of a barrier for the market, but one should be paying closer attention to the overall consolidation area that we have been in.
- This is defined by the $60 level underneath as support, and the $65 level above as resistance. With that being said, the market looks as if it is still trying to find some answers to multiple questions.
Crude Oil Could Be Noisy
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Crude oil markets could be noisy over the next several months, because typically this time of year is very bullish for this market, but we have a lot of questions asked about supply and demand. Quite frankly, OPEC continues to flood the market with crude oil, and that will continue to keep a bit of a ceiling above the market, but at the same time this is typically a very bullish time of year as you start to see more vacation travel and quite frankly the “driving season” in the United States comes into the picture. However, you also have to keep in mind that there are a lot of concerns about the global economy slowing down, and therefore people would determine that there might be less demand for crude oil as it is the quote lifeblood of the global economy.”
Ultimately, this is a market that I think does have a little bit of a floor in it, but I think it’s also just waiting to get some type of catalyst. We’d sold off quite viciously, and you can even make an argument that we are in the process of trying to form an inverted head and shoulders, but we obviously have a long way to go before that actually kicks off. Because of this, I am optimistic, but I also recognize that you will need to be very patient at this point.
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