The WTI Crude Oil market went back and forth during the session on Wednesday, essentially hugging the $95.50 level. I still see the area above as significant resistance, so as far as buying this market is concerned it's very difficult to come up with an idea or reason to. During the session, we saw the oil inventories in the United States build by 2.5 million barrels, as opposed to an expected loss of 1.4 million. This of course shows that demand for oil is sought, if not almost nonexistent. Because of this, the markets did pullback from the highs, and because of this I am a bit more bearish than I was yesterday.
Looking at this chart, I can see that the $97.00 level offered significant resistance again, and because of this we feel that we are towards the top of the consolidation area, as opposed to anywhere else. Granted, we are not at the $97.00 handle, but we are close enough to know that we cannot buy up here.
Range bound for the summer
Until I see differently, I believe that we are stuck in a range for the summer, and at this point time we are closer to the top of it than the bottom. Because of this I am of the more bearish, especially considering the supply numbers came out so bearish, bonds also recognize the fact that there are so many minor support and resistance areas in this five dollar area, that it's almost impossible to trade this market right now. With that being said, I am not trading oil at the moment.
It would take a daily close below the $92.00 level for me to get aggressively short, but in reality I could justify selling below the $94.00 level on a short-term basis. As far as going long is concerned, we absolutely positively have to get above the $97.00 level to even have that conversation. Otherwise, you are simply looking for a few dimes at a time at best. This market desperately need some type of direction, and more than likely it won't get it until fall.
