Crude oil markets continue to grind higher overall, as Tuesday was more of the same. The market looks likely to continue to go higher at this point, but we are getting overextended to say the least. At this point, it’s likely that we will continue to see volatility but that’s nothing new with the crude oil market these days.
The WTI Crude Oil market has rallied again during the day on Tuesday, reaching towards the $75 level. That’s a very bullish sign, and I think that we could get a little bit of a short-term pullback, but quite frankly I think that any dip at this point is going to be thought of as a potential buying opportunity, as it will represent value in a market that cannot stop rallying. There are plenty of concerns about disruption of supply in Libya, Venezuela, and of course I ran. With this, it makes sense that we continue to see strength, even in the face of a strengthening US dollar.
Brent markets rallied a bit during the trading session on Tuesday but seem to be struggling at the gap from a couple of sessions ago. This is an interesting turn of events as WTI continues to rally significantly, but at the same time Brent has been a bit of a laggard. The crack spread is starting to shrink, and that is a bit of an anomaly. However, I think that overall it’s difficult to sell this market and I think that the $77 level underneath is massive support. It looks as if the $80 level above is going to be massive resistance, and I think that it’s going to take something rather special to break above that level. Between the two markets, I prefer buying WTI.
Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.