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Christopher Lewis
Crude Oil WTI Brent

WTI Crude Oil

The West Texas Intermediate Crude Oil market has initially rally during the trading session on Monday but has given back the gains as we got close to the $50 level. The $50 level of course is a psychological barrier, so it tends to attract a lot of attention. That being said, the fact that we gave back so much so quickly tells me that it is going to be difficult to break out above. With that in mind, I anticipate that we simply continue to go back and forth in the area that I have marked out on the chart, with the $44 level being the absolute “floor in the market.”

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Crude Oil Video 05.01.21

Brent

Brent markets found the $53.25 level to be resistance, pulling back significantly from there. That being said though, Brent does look like it is a bit stronger than WTI, perhaps due to Chinese demand. With that being the case, I think that if you are to place a spread trade, you probably want to buy Brent and sell WTI, but both of them are going to be moving in the same fundamentals. With OPEC+ meeting during the day, there will be plenty of headlines the move crude oil in the short term given enough time.

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To the downside, I think the $50 level will cause a certain amount of psychological support as it has the benefit of being a large, round, psychologically significant figure, but it has also shown itself to be supportive all the way down to the $49 level. With this, I still think you can buy the dips, but it may be a bit choppy and noisy in this general vicinity.

For a look at all of today’s economic events, check out our economic calendar.

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