- The West Texas Intermediate Crude Oil market has had a wild day during the trading session on Monday, initially dipping down to a fresh, new low, before turning around and showing signs of life.
- There had been some manipulation of the market by various outlets, suggesting that OPEC was going to increase production by 500,000 barrels a day.
- This drove prices down, but OPEC quickly came out to completely rebuff this rumor, and prices started to rally from there.
At the end of the day, the WTI Crude Oil market has ended up forming a bit of a hammer, which of course is a bullish sign. It’s also during turning into a “double bottom”, which of course will attract a lot of attention. Breaking down below the double bottom is a very strong sign of negativity, and at that point could send this market much lower. In that scenario, we could really start to see the oil market unravel.
Waiting for a Correction
A lot of this is going to come down to how traders “feel about the market”, and perhaps even more importantly, how they “feel about the man.” After all, there is a bit of a restriction of supply, but at the same time, it depends on which part of the world you are talking about. There are a lot of oil storage facilities in the European Union that are overflowing with crude oil, as the EU went out of its way to buy as much Russian oil as it could ahead of the Russian sanctions that come into play on December 5.
Ultimately, this looks like a market that’s ready to bounce a bit and perhaps head back into the consolidation area. It’s possible that we are trying to form some type of new range, perhaps with the $75 level underneath as being major support, while the $90 level above could be major resistance. There is a lot to consider over the next several months, as we begin to worry about the possibility of a complete global slowdown, which of course means that there will be a lot less demand. However, the actual physical market is nowhere near as easy as this chart would suggest, meaning that you would have to think sooner or later there would be a correction.
Ready to trade our WTI Crude Oil trading prediction? We’ve shortlisted the best Forex Oil trading brokers in the industry for you.