A consistent state of persistent anxiousness has enveloped WTI Crude Oil which went into this weekend nervously and is set to deliver another dose of unclear circumstances when it opens on Monday. The commodity has become a place to test perceptions regarding sentiment. WTI Crude Oil values remains a talking point not only among commodity traders, but for those watching global markets as it underscores its importance to the worldwide economic picture. Price action upon its opening tomorrow morning will be relevant for all market participants.
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How Hormuz and Iran Tension Are Shaping WTI’s Current Tone
The past handful of months has seen a rather consistent saga regarding WTI Crude Oil as a barometer of behavioral sentiment in the marketplace. However, a bit more than one month ago many market participants had allowed themselves to believe WTI Crude Oil was about to return merrily to its long-term lower realms. Yet, once again the Hormuz Strait is dominating a lot of the news surrounding WTI Crude Oil prices, this as navigation of the important logistics route for oil tankers remains noteworthy.
The past week and half has delivered a reminder for those who got too placid with their lower priced WTI Crude Oil hopes, that the Middle East remains volatile and a place where escalating rhetoric can turn into actual military conflict quickly. Yet, the question that speculators in the WTI Crude Oil market might find worthwhile is to consider if there will be a limit to the pessimism. Because as surely as WTI Crude Oil has seen more buyers enter its spectrum, there has also been a rather stubborn ability to maintain prices below what could be considered extreme higher ratios – at least up to now.
What Friday’s Run Higher Shows About This Week’s WTI Behavior
WTI Crude Oil went into this weekend near the $81.700 mark via futures pricing. The commodity is now at a one month high. Price action remained somewhat capable of staying below the $80.000 level consistently until this past Friday. Yes, there were certainly spikes upward in the commodity that signaled nervous buying sentiment consistently the entirety of last week in which higher prices were being tested, but until Friday there had not been sustained pressure beyond $80.000. Only then did the $80.000 mark prove consistently vulnerable, and then the $81.000 level also showed it was capable of being penetrated. Before closing for the weekend the $82.000 realms was challenged too.
Perhaps the upswing in WTI Crude Oil can be explained away by insisting large players were positioning themselves with buying orders before the weekend came and the potential of another escalation between Iran and the U.S. Open positions in WTI Crude Oil will be a solid barometer of market sentiment when trading starts tomorrow. Prices will reflect sentiment early on Monday and smaller traders should be braced for a dynamic test. The escalating prices seen last week seemed to go into overdrive on Friday. Monday will provide a barometer regarding the status of sentiment following the weekend and developments from the Middle East.
Balancing Middle East Rumors With WTI Fundamentals
While day traders in WTI Crude Oil act on the developing news from the Middle East, they must also consider the notion that a lot of what they are hearing is fearmongering and rumors. Experienced large players in WTI Crude Oil who have participated in the energy sector over the long-term and have dealt with volatile bursts of news developments from the Middle East before.
Yes, the price of WTI Crude Oil is elevated, but it is below the higher elements of mid-term values. The $82.000 level could prove to be an important juncture point for traders short and near-term. If $82.000 is punctured and sees consistent trading this could open the door to another step higher, which would likely mean additional nervous impetus has developed from the Middle East. A question of fundamentals though remains important in WTI Crude Oil regarding supply. Can oil tankers provide customers with a steady supply of Crude Oil and create calmer sentiment?
WTI Crude Oil Price Chart
What a Different Middle East Weekend Could Mean for WTI
While many traders may find it logical to contemplate the higher price realms, something can be said for the potential of lower velocity in the commodity. While $80.000 stood out as a target most of last week for many traders, it wasn’t until Friday that persistent values above this mark were accomplished. There is a possibility that large players wanted to go into this weekend with long (buying) positions just in case worse new developed between the U.S and Iran. There still is a lot time remaining in the weekend. If there is not a severe escalation of tensions, perhaps this will ease existing sentiment and the price of WTI Crude can find room to decline.
What Traders May Watch Next as WTI Opens the Week
Speculators need to remain calm and not let their emotions guide them while making decisions. The temptation to react to developing news from the Middle East cannot be faulted, but it must be balanced with the realization the Iranian saga has been taking place for a handful of months. An escalation of military conflict is a threat, but large players have the capability to find calm. Consideration of higher prices is logical, but potential steady or lower WTI values must be taken into account depending on developing circumstances.
WTI Crude Oil Short Term Outlook:
Current Resistance: $81.950
Current Support: $79.600
High Target: $82.700
Low Target: $78.200
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