Crude Oil Price Analysis – Crude Oil Continues to Chop in Nervous Market Conditions

Crude Oil Technical Analysis

The crude oil market continues to be very noisy as we bounce back and forth due to the war in the Middle East and a lot of the noise that we are starting to see is based on the latest headlines. However, keep in mind that the light sweet crude oil market is based on North American oil, West Texas Intermediate. Any boost to this is probably going to be more along the lines of people trying to get a grip with exports coming out of the United States. It’s not really a supply problem in this particular version.

Key Price Levels and Market Behavior

That being said, this is a market that I think continues to see the $100 level above a large, round, psychologically significant figure and a pretty significant barrier. If we pull back from here, the $85 level could very well be tested, and then after that, the $78.50 level.

As long as there is a shooting war going on in Iran, I just don’t see how oil drops significantly other than the occasional headline that causes disruptions. It should probably be thought of as a buy on the dip scenario. Brent markets are still pricing in a significant premium at this point in time. It is right around $14 a barrel. It is well above the $100 level and of course, it makes sense because Brent’s a little closer to what we’re dealing with in the war.

The $100 level underneath would be a support level that I think a lot of people would be watching, as it’s a large, round, psychologically significant figure and an area that’s been important multiple times. Breaking down below that level opens up a flush lower, and while I see how that could happen in theory, right now I suspect that any time this market drops a bit, there’ll be somebody out there willing to buy it. $120 continues to be a major ceiling.