The WTI Crude Oil markets fell rather drastically during the session on Friday, cracking below the $92.00 level. This was a significant breakdown, and it appears that we are now heading towards the $90.00 level. This is very interesting as the markets had been so comfortable lately. The fact that we can do this suggests that there are underlying concern, and that we need to test "bigger areas."
I believe that the $90.00 level will more than likely will hold, and as a result we may just be expanding the range of that. For the short-term trader, selling on a break of the lows from the Friday session is possible, but again the $90.00 level should in fact offer some type of support going forward. On top of that, you have to watch what happens with the US dollar, and whether or not it starts strengthening rapidly.
With the way this market has been behaving, I'm kind of surprised that we broke out of this range. One of the cleaner ways to play this is probably in the USD/CAD Forex pair, as it has a little bit more room to run then this market may. However, there are a lot of different ways to play the oil markets too, and as a result you may find options to be a viable alternative to risking money in a choppy futures market. After all, crude oil is one of the more expensive contracts to deal with.
Economic numbers will be scrutinized
There are various economic indicators out there that will be scrutinized, mainly for a hint as to whether or not the economies around the world are expanding. If they are, then by logical extension the demand for crude oil should increase as well, causing prices to go higher. This will be the most important thing pay attention to, and the most important economic indicator comes out this coming Friday, which of course is the nonfarm payroll numbers in the United States. If those are strong, expect crude oil to have a decent boost as it shows that factories could be hiring again.
