Crude Oil Pulls Back From Extreme Highs

WTI Crude Oil

The West Texas Crude Oil market has fallen a bit during the trading session on Wednesday to show signs of exhaustion because quite frankly we got up here far too quickly. That being said, the $130 level does look like a bit of a resistance barrier. A pullback from here could send this market towards the $110 level, possibly even the $100 level.

To the upside, the $130 level being broken would be a very bullish sign, but I would not be a buyer of that unless we went sideways for a while in order to work off the excess froth to the upside. It is a market that has a lot of external pressure on it, and I do think ultimately, we go higher, but at the very least we need to work off some of this momentum.

Crude Oil Video 10.03.22

Brent

Brent markets have done the same thing, as they are trading at about the same price. Ultimately, this is a market that I think continues to see a lot of problems, mainly due to the fact that the supply of Russian oil is coming offline, and of course, the reopening trade has been a lot of stress on supply, to begin with.

Beyond that, inflation tends to feed on itself, so we have seen the oil market reacting kind. While we are overdone at this point, and certainly are in the midst of some type of correction more likely than not, I am not selling this market because it is going to continue to be one that a lot of money flows into over the longer term. As long as we stay above the $100 level, I believe this is a bullish market.

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