Crude Oil prices will open this week via the West Texas Intermediate near short term highs. Having gone into the weekend near the 87.78 ratio, this is within clear sight of higher values produced on Thursday when WTI traded above 89.25 USD briefly.
A number of factors could be playing into the high price of Crude Oil. Record low energy reserves in the U.S, a rumor that export demand has raised for U.S energy, flashes of cold weather, and speculators may believe the coming U.S election might be having an affect too.
Price of Energy Remains High which is good for Speculators and bad for Inflation
Thursday’s high made this past week began to flirt with ratios in Crude Oil not seen since the second week of October. On the 7th and 10th of this month WTI was above the 91.00 ratio. This past Monday on the 24th of October the price of Crude Oil actually sank to 82.30 USD. This price disparity in WTI Crude Oil highlights the ability speculators have to pursue wide support and resistance levels.
The cost of Crude Oil also shows that inflation is going to be difficult to control as long as higher energy prices continue to spark the economic landscape via all of its natural effects on more expensive logistics, manufacturing, and agricultural because of fertilizer costs associated with oil byproducts.
The 86.00 price mark as support early this coming week should be watched. However if WTI Crude Oil remains above the 87.00 USD ratio, this will get the renewed attention of bullish speculators who have witnessed higher prices repeatedly. Yes, a long term chart of Crude Oil via a 6 month chart shows the price of the energy has come down, but also shows some intriguing support near the 82.00 mark which has seemingly seen bounces.
- If prices early this week remain above the 86.75 USD mark in WTI this could spur on the notion higher prices will develop speculatively.
- Traders who feel obliged to sell WTI based on the belief it is too costly considering the recessionary data globally that is being seen, should be cautious and use adequate stop losses.
Crude Oil Remains within the Grasp and Power of Large Speculative Players
Behavioral sentiment based on the belief China may be starting to stock up on Crude Oil can have an effect of speculative buying. Crude Oil may seem like it is still expensive, but political concerns and economic factors can play into the price of the commodity quickly and traders need to be ready for fast moves. The use of conservative leverage is a key when trading WTI Crude Oil.
WTI Crude Oil Weekly Outlook:
Speculative price range for WTI Crude Oil is 83.10 to 91.20 USD.
If WTI Crude Oil should fall below the 86.50 mark early this week, it could show that speculative buying has lost some power. A lower drive towards the 86.00 and 85.000 realms would not be much of a move for the commodity. Last week’s low’s might not be seen if speculators believe political concerns regarding Russia remain high, support does look rather interesting below the 84.00 realm for traders who are tempted to look for an upturn.
With the coming U.S election, do not be surprised to hear WTI Crude Oil prices mentioned plenty. The election on the 8th of November in the U.S will largely be determined on economic conditions and Crude Oil is a large piece of that puzzle. If Crude Oil were to trade above 88.00 this would make a lot of alarm bells go off and potentially ignite buying which could challenge the 90.00 and 91.00 ratios rather easily again in the short term.
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