The WTI Crude Oil markets fell initially during the session on Wednesday, but as you can see found enough support near the $93.50 level in order to bounce back up and close above the $95.00 level. On top of that, the session before had a shooting star form, so it now looks as if this market is trying to consolidate in this relatively tight area. The high of the consolidation area is at the $96.00 level, and the low of the consolidation area is near $94.00 as the market looks ready to grind sideways.
That being the case, it looks like we will more than likely see a lot of choppiness going forward, and that has been the modus operandi of this market for quite some time. Because of this, I have found this market very difficult to trade, although overall I would expect to see a continuation of the overall consolidation between $92.00 and $97.00 as it has been so trustworthy sense late April.
Supply and Demand
The supply and demand when it comes to light sweet crude has to be in question as economic numbers continue to look relatively week overall, and that includes the United States. That being the case, I have a hard time hanging on the any position in this market for any great length of time. After all, this is more or less driven by the value of the US dollar than anything else in my opinion, and that being the case, I am a bit hesitant to play this market at all.
If we managed to break down below the $92.00 level, I would think the $90.00 level would be the next area that the market would try to aim for. On top of that, if we can get above the $97.00 level, I think that this market could go up to the $100.00 level in relatively short order. Above there, we could really start to take off to the upside in this marketplace, but I believe that it would take some type of market shock actually make that happen. Expect to see continued choppiness, and very unwelcoming trading conditions for the balance of the summer.
