The WTI Crude Oil markets tried to rally during the session on Monday, but didn’t hang onto the gains as selling pressure intensified. This would have partially been based upon the weaker than anticipated ISM numbers out of America, and as a result there will be concerns about whether or not the US economy is moving at an acceptable pace. If there is a weak economy in the United States, this will of course have a massive effect on the value of the crude oil markets in general.
The $96 level looks as if it wants to offer some kind of support, and because of this I am not comfortable selling this market at this area. With this, the market looks as if the buyers could step in soon, but with the Non-Farm Payroll numbers coming out on Friday, there is a good chance that the oil demand picture might be based upon hiring, the correlation being that if factories are hiring, they will be making things. The use of oil should increase, and as a result this should bring demand up.
The week could be tricky.
With the Federal Reserve under the microscope, there is a chance that the oil markets might struggle over the next couple of days. When I say struggle – I mean make any serious move in one direction or the other. The market has been choppy for some time, and I see nothing in this chart to suggest that the market is going to be any different over the next several sessions.
The candle for the session is a bit of a shooting star, so even with the support at $96 level, there is a chance that the market falls. The support below extends down to the $95 level though, so I have a hard time believing that the market will fall far, regardless of the weakness. Also, there aren’t too many traders that will be looking to get into the market ahead of the numbers on Friday, as they will be far too important for that kind of gambling.
