- The month of January has been somewhat negative for the crude oil market, although it’s probably worth noting that we are in the middle of the range, and this is a range that we have been in for quite some time.
- Ultimately, I think this is a market that is probably going to continue to be somewhat sideways and noisy, which makes a certain amount of sense when you take everything into account.
After all, the market has seen the $78.50 level is a major resistance barrier, while the $67 level has been a major support level. This of the range that we have been in since the middle of last year, and nothing has changed to push it out of this range. There are a lot of concerns right now about the price of oil from Donald Trump, but it doesn’t set prices. OPEC will only pay lip service to this, and I think at this point in time we need to pay close attention to the idea of whether or not global demand is going to pick up or fall. For what it is worth, the last reading of inventories in the United States was a bit higher than anticipated for the month of January.
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If that’s the case, you could start to see a little bit of demand disappear, but really at think at this point in time you got a situation where traders are going to continue to look at this through the prism of a situation where it comes down to what the US economy is going to do, because that is the main driver of demand for Light Sweet Crude, or what is also known as West Texas Intermediate. All things being equal though, this is a market that I think will continue to be more or less “buy on the dip” with the $67 level underneath being a massive floor in the market. With this being the case, I think if you are patient enough you can probably find value in this market.
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