Crude Oil Markets Rally Significantly on Fear

WTI Crude Oil

The West Texas Intermediate Crude Oil market has shown itself to be rather volatile, reaching all the way to the $100 level after Ukraine was attacked by Russia. We have given back about five dollars from the top, but this was a move that was going to happen sooner or later anyway. Quite frankly, Russia was just the excuse to push this market higher as we have a lot of supply constraints, and despite the fact that the Biden administration is suggesting that they are going to release crude oil from the Strategic Petroleum Reserve, that will be short-term relief at best. Because of this, I think that if we do get a pullback, it should end up being a nice buying opportunity with the $95 level being one area, and then somewhere between there and $90 we should see more buyers jumping back in.

Crude Oil Video 25.02.22

Brent

Brent markets also have rallied significantly during the course of the trading session as well, slicing all the way up to roughly $103 without much hesitation. We are sitting just below the $100 level, and I think Brent is more likely to take off quicker than the WTI grade, simply due to the fact that the Brent grade of crude oil is more likely than not going to be more affected by what is going on in the European region. WTI tends to be more of a US grade of crude, although it certainly will move in the same direction. Because of this, I believe that this is also a “buy on the dips” type of situation, just like its American cousin. I have no scenario in which a willing to short.

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