The WTI Crude Oil markets had a very strong showing during the session on Wednesday, slamming into the $105.25 level. The market looks like it's trying to rally again, although we are at an area that looks like it could be somewhat resistant, it's more than likely going to give way as the markets continue to go higher. After all, we have seen a fairly parabolic move higher, and that only means that there is some force below it.
The markets will more than likely react to what's going on with the Federal Reserve, which of course seems to be anybody's guess. With that in mind, the value the US dollar will probably be the biggest driver of this market. It certainly isn't demand, because the inventory numbers out United States were actually higher than anticipated during the session on Wednesday, yet we rose.
Probably a market to avoid at the moment
There is a possibility that we will continue the downtrend from the last couple weeks, but quite frankly it looks like this market wants to go higher. That being said, it appears that this marketplace will struggle in either direction, simply because of the confusion out there. I feel that the liquidity is in the marketplace right now, and the "big money" simply isn't in the marketplace right now. That leads to violent moves back and forth, and quite frankly moves that you cannot trust.
I still believe that the $110 level will be a bit much for the marketplace, so I think we are going to look at the market as being consolided, but with a lower bias. I don't think we will get below the $99 level, simply because it is so supportive overall. Going forward, I do not expect this market to behave "normally" until we get to the middle of September, possibly even after the Federal Reserve meeting. Because of this, I have not been a big fan of this market anyway. Options are probably the best way to go, simply because you can limit your losses at this point.