The WTI Crude Oil markets fell again during the session on Friday, to continue the selloff that we have seen over the last three sessions. The main culprit of course is the US dollar and the Federal Reserve, as the Federal Reserve has suggested that they are going to taper off of quantitative easing over the next several months, and possibly be completely out of that game by the middle of next year. Because of this, the value of the US dollar continues to climb, and as a result we should see commodities continue to drift lower overall.
However, we do have a significant amount of presidents for a consolidation area to continue in this market, as the $92.00 level has been extraordinarily supportive in the past. Even below there, I believe that the $90.00 level should offer support as well, so truthfully I think that we are getting closer to the bottom where we will have buyers step back into try and pick up value in this market.
Watch the US dollar
The supply and demand situation in this market doesn't dictate a high value. However, the markets have simply ignored back, and based most of the moves upon the US dollar recently. It wasn't until we got the massive strength in the US dollar on Wednesday, Thursday, and Friday that we began to see a correction of what I personally believe is an expensive market.
Going forward though, I think that we will more than likely see a bounce from the 92 points or zero dollars level, but I find it very difficult to believe that we will ever be able crack the $100.00 level, at least not during the summer. Of course, there is always the possibility of some kind of headline coming out of the Middle East that throws everything in disarray, and God knows Syria is trying to be that catalyst. However, the searing still have oil, so unless they can drag the rest of the region into a fight we should probably be fairly all right over the course of the next couple of months.
