WTI Crude Oil
While I don’t think that we are out of the woods quite yet, the massive swell of volume in the WTI market on Tuesday, along with busting through major resistance at the $66 level, tells me that there is underlying demand. As I record this, I would point out that we did struggle at the $66.50 level, the next barrier, but at the end of the day we had just sliced through one in the same candle. That might be a bit much to expect in one fell swoop. I do think at this point we are looking at a “buy on the dips” scenario. With this in mind, I suspect that this market will probably go looking towards $67.50 on the break out. If we do break down below the $65 level, that could change things, but right now it looks like there is plenty of volume underneath.
Brent
Brent markets also rallied, but not as stringently. The $73 level has offered a bit of resistance, and therefore I think it will remain a laggard to the WTI grade, as far as momentum is concerned. The two markets had diverged enough to cause this move and the necessity of it, so I think eventually they both will go higher but if I had to pick one or the other, right now it looks like West Texas Intermediate is the way to go.