The WTI Crude Oil markets fell apart during the session on Wednesday, as futures traders sold off the commodity. This of course was aided by a larger than anticipated Crude Oil Inventory build during the session on Wednesday as the US added 2.6 million barrels as opposed to losing 600,000 barrels as anticipated. Because of this, it shows just how much supply of crude oil there really is. With this being the case, I believe that this market will continue to sell off. I think that the $40 level will continue to be targeted going forward.
Ultimately, I think that it’s only a matter of time before we do find buyers, but that time isn’t going to be anytime soon. After all, we are towards the end of summer and there is a serious lack of demand. I am paying attention to the longer-term charts for a buying opportunity, but I do not have that signal quite yet. With that, the only thing you can do in this particular market is sell.
Selling rallies and breakdowns
I would be selling rallies as they appear, fading resistive candles. I believe that the sellers will come in to punish this market time and time again, and as a result it’s probably only a matter time before we get some type of sell off. Again, it’s not until we get a long-term signal to start buying that I could consider doing so. In the meantime, I would anticipate that short-term charts are probably the best way to go as the volatility will be extreme. Commodity markets in general continue to punish, mainly because of a stronger than usual US dollar, and then of course a serious lack of demand for commodities in general. Simply put, crude oil just simply isn’t needed at the moment.
With this, I think that $40 will cause a bit of a bounce, but at that point in time I think the sellers will also be looking to really plow into this market. If we break down below $40, $38 would probably be the next target.
