Crude Oil Price Analysis – Oil Jumps After Attacks

WTI Crude Oil Technical Analysis

The light sweet crude oil market gapped straight up in the air after the new war has broken out again against the Iranians at the open for the week but has since spent time jumping all over the place. If you are looking for a good place to blow up your account, the oil market will offer that opportunity. It is awfully tempting to jump in and buy oil, but you can see that if you did that at the open in the futures market, at least you were buying right around $75 a barrel, saw it drop down to $69 or so, and now it’s back up to $72.40.

In other words, with leverage, there’s a real chance you destroyed your account. If you didn’t, then you have to understand that we saw this back in June and as soon as the oil flow is thought to be safe, this thing will fold like a house of cards. In the short term, yes, there’ll be plenty of opportunities, but those opportunities, I think, will go back and forth between buy and sell.

This is an extraordinarily dangerous market. As an analyst, I would be remiss if I didn’t tell you how dangerous this is. I’ve seen this before and this is a market that, although exciting, probably isn’t one to be messed up with as retail traders just simply have a huge disadvantage with information coming to you so slowly. You can see on the short-term charts how the market has behaved. I wouldn’t necessarily be a seller of oil but to think that it is a straight shot higher, well, people have already lost that game this morning.

Brent Technical Analysis

Brent markets rose as well, rallying to the $82 level, an area that previously had been resistant before pulling back. They look a bit healthier, but that makes sense, it’s a little bit closer to the action right now.

On Friday, I did say something about if there is military action, there’s a real chance that Brent outperformed light sweet crude, and so far, that’s been the case. The question now is, can we keep up this type of momentum, and the answer, of course, is it depends. It depends on what happens next as far as the conflict is concerned. If you know that ahead of time, then that’s how you trade this. Otherwise, you have to assume that sooner or later this market falls apart.

I actually would look to short the oil market, I just wouldn’t do it right now. I need to see that the oil supply is going to be fine. The reality is the light sweet crude market is based on North American oil, which is not disrupted, and Brent, of course, is overseas and therefore a little more susceptible. The supply of oil is still out there; it will just have to be routed from other sources.

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