Crude Oil Price Analysis – Crude Oil Continues to Move to Headlines

WTI Crude Oil Technical Analysis

The light sweet crude oil market jumped initially on Monday as the tensions in the Middle East seem to be going nowhere, but we have since settled down a bit. We are hanging around the $110 level as New York opens and it will be interesting to see what New York traders do with it.

I think we have got a scenario where a lot of traders are looking at this through the prism of whether or not there is still concern about the Strait of Hormuz being closed or if we are moving beyond that. I don’t think we are yet and I do think the occasional headline will continue to be a catalyst for bigger moves. As things stand right now, it looks like we are just trying to find some type of equilibrium. We are a little stretched to the upside.

Brent Technical Analysis

Brent markets look a little bit more in balance as we are hanging around the $110 level as well. The $100 level at the bottom is an area that I would be looking at very closely, but I also would say that if we were to break down below there, that could be very important.

We’ll just have to wait and see, but I do think we have a scenario where traders are looking at this through the question of whether or not the Strait of Hormuz will be opened. It is worth noting that during the weekend, we did see the OPEC+ countries agree to voluntarily release or produce 206,000 more barrels a day, and perhaps the market is trying to sort out whether or not that will flood the market with oil once the Strait has been reopened.

In the short term, I think we are just killing time in this area, and I think grinding back and forth would make a certain amount of sense here. With that being the case, I’m somewhat neutral, actually, although I certainly don’t short oil in this environment. I think we just stay in a range until we get some type of clarity out of the Iranian conflict and right now, it just looks like it is going to drag on.