The crude oil markets have been very noisy over the last week, showing signs of both positive and negative momentum. I think there are a lot of questions when it comes to crude oil, as there are so many different factors moving the markets.
The WTI Crude Oil market finish the week relatively flat, after bouncing around significantly. It looks as if the $57.50 level is essentially “fair value” over the last month or so. I think that we are essentially stuck in a range, and therefore it’s going to be almost impossible to trade this market from a longer-term perspective. After all, OPEC is doing production cuts along with Russia, but at the same time higher prices will bring American oil into the market in larger amounts. OPEC has recently released a white paper suggesting that the Americans are going to be a bigger problem than originally thought.
Brent markets went back and forth during the week, ultimately forming a shooting star. However, we are preceded by for hammers, so although the shooting star is a very negative sign, I think at this point you can’t make too much out of it. I think we continue in a range in the short term, and probably through the rest of the year. In other words, this is a market that cannot be traded from the longer-term outlook anytime soon, I think there are far too many headlines out there that can move the market. I would suggest to perhaps a pullback is necessary, but it doesn’t necessarily mean anything as there are so many different support levels and resistance levels in such a small area. Volatility is here to stay, so therefore I suspect that short-term charts will be the only way to trade this market.
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.