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Crude Oil Price Forecast – crude oil markets extraordinarily volatile on Tuesday

By:
Christopher Lewis
Updated: Sep 5, 2018, 05:06 UTC

Crude oil markets were extraordinarily volatile during the trading session on Tuesday, initially spiking higher during Asian trading as there are concerns about a hurricane in the Gulf of Mexico. However, we have since reversed that move, and an ominous sign.

Crude Oil daily chart, September 05, 2018

The WTI Crude Oil

The WTI Crude Oil market has been extraordinarily volatile during the trading session on Tuesday, reaching down towards the $70 level after initially going as high as $71.40 during Asian trading. This is an extraordinary turnaround, and it shows just how volatile and dangerous this market can be. That being said, I think the $70 level could offer a bit of psychological support, and most certainly there is support at the $69.50 level. I think there will be a nice opportunity to go long eventually, but at this point the market is far too unstable to take a chance on that.

Brent

Brent markets did the same thing as you would expect and have completely collapsed later in the day. The question now is whether or not the $78 level can hold as support. If it can, then that’s a very bullish sign. Otherwise, I think that the market could find itself down at the $77.50 level without much trouble. Ultimately, this is a market that will continue to be very noisy, as we have headwinds of global growth, hurricane, and of course the US dollar. Expect a lot of noise, and therefore you may wish to keep your position size very small if you feel inclined to trade this market, which by all means if it makes you nauseous because of the volatility, you shouldn’t be involved at all. I do think that the buyers will return, but let the market stabilize before you put any serious money to work.

About the Author

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.

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