By: DailyForex.com
The WTI Crude market had a relatively benign trading session for the Monday hours. In fact, the daily candle formed a shooting star. The chart attached is article was actually the one hour chart, and it does look at we are starting to wilt a little bit near the $97.00 level. Is because of this that I expect this market to pullback slightly, but I'm not necessarily looking for any type of meltdown.
.jpg "crude oil may 21")
This market is far too choppy going into the summer months to be bothered with looking at the longer-term at this point, as the move simply aren't that big anymore. Looking at this chart, I think that not only is pullback coming but perhaps even a move down to the $95.50 support level.
The Saudis have taken a bit of their production off-line in order to remove the decline that we have recently seen in the oil market, but in the end demand will really be what matters. That being said, demand for oil it's tepid around the world, with maybe the exception of North America. This particular market is more sensitive to the United States and Canada, so does make sense that it looks a little bit stronger than the Brent market overall.
Short-term trading only
I do not see a situation where we break out of this choppiness anytime soon. After all, we are getting towards the time of the year that a lot of traders will simply walk away from their desks and focus more on beaches, and that being the case there is a serious lack of volume coming soon. With the lack of volume, there is the possibility of a liquid moves, but in reality that normally just means we chop around violently.
The candles for the Monday session do of course suggest that perhaps we are starting to exhaust ourselves a bit, and even if we do continue higher I am afraid that the $98.00 level will be rather resistive. The $99.00 level looks resistive as well, and we are getting close to the top of the range that we have been trading in recently, so I feel that there is definitely more risk to the downside at this point.