- The light sweet crude oil market continues to see a lot of volatility on Monday, as we have in fact gapped to the upside and then rallied a bit, but we are already starting to see some of the strength leave the market.
WTI Crude Oil
Quite frankly, this is a market that I think will be rather erratic over the next couple of days as we have seen so much volatility earlier in the autumn that it makes a certain amount of sense that as we head from winter into the new year, we have a lot of business to be taken care of in light volume that people will have to square their positions.
Remember, it was just a couple of months ago that new sanctions against Russia were announced and crude oil spiked above the $62 level. Since then, we have seen a nice adherence to the 50-day EMA as resistance, and of course, we also have a downtrend line that should be paid attention to.
Fading The Rallies
As I have stated numerous times recently, I believe in fading any rallies that show up in the crude oil market because, quite frankly, there is just no reason to think that things are going to get better anytime soon. The supply is still strong, the demand is still weak, and of course, we have to worry about whether or not the global economy is starting to slow down.
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If, in fact, it is, then you have a situation where the market participants will continue to try to push this thing through the $55 floor. To the upside, the $60 level will continue to be resistance, so I do not necessarily expect to see a breakout above there, but if it did, that would at least demand paying attention to, as it would be a change in behavior over the last couple of weeks of negativity.
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