Crude Oil Price Analysis – Crude Oil Continues to Move on Every Headline

WTI Crude Technical Analysis

The light sweet crude oil market has rallied just a touch during the early hours on Tuesday as we continue to see a lot of noisy behavior. Ultimately, this is a market that I think continues to move on to the latest headlines coming out of the Middle East more than anything else.

Quite frankly, this is a scenario where we continue to see a lot of back and forth just coming into the picture based on the latest headline. As things stand right now, the markets are doing everything they can to re-enter the previous consolidation area as we just don’t know what to do other than to buy oil. I think that’s the situation we’re in right now. We are just simply stuck.

That being said, we also recently saw a couple of statements suggesting that the war might slow down or maybe even wind down, and if that’s the case, it will crush the price of oil. However, we keep getting things like missile attacks in Tel Aviv and some attacks by the Americans on the Iranians, and as long as that’s the case, I anticipate that the markets remain buy on the dip. The $100 level above, I think, for the time being at least, is your ceiling.

Brent Technical Analysis

The Brent market is very much the same. We fell down to the $100 level on Tuesday only to turn around and show signs of life. The question now is whether or not market participants can continue to hang on to positions or will we use the Monday positioning after the tweet by Donald Trump to give us a bit of a heads-up as to how this plays out.

I think that’s probably the case. So, while you can buy dips in the meantime, recognize that sooner or later the hostilities end. And if and when they do, markets will just crater at that point. I would anticipate Brent would hit $85 almost immediately. To the upside, we do have a significant amount of resistance at various points. I would say the $105 a barrel level is what we’re fighting today. Breaking above there opens up a move to $112. Again, all it takes is confirmation to the succession of hostilities and the oil markets fall apart. Until then, expect a lot of volatility based on the latest tweet, and therefore, your position sizing is the only way you can protect yourself short of staying out of the market.