WTI Crude Oil Weekly Technical Analysis
The light sweet crude oil market has been all over the place during the week as the rhetoric from the war continues. Every once in a while, we will get good news, every once in a while, we will get bad news, and the market is just jumping on the latest headline.
It looks like we are going to threaten the $100 level again, and that, of course, is a large, round, psychologically significant figure that a lot of people will be paying attention to. The market dropping down to $85 and then bouncing straight back up, of course, is a sign of just how sensitive we are at the moment. It is worth noting that we are still very much in the range we had been in over the previous couple of weeks.
Psychological Significance of the $100 Level
Brent markets look like they are going to do everything they can to reach the $120 level again. The market has been extraordinarily volatile, and you would expect that, considering Brent is going to be a little bit more sensitive to the Middle East. Having said that, if we can break down below the lows of the week, that could open up a significant plunge.
Really, at this point in time, though, the only thing that makes that happen is going to be peace breaking out in the Middle East. There has been a lot of rhetoric thrown around in the last 24 hours, which, of course, keeps the markets very lively.
If we break $120, we do not really know where we go at that point, possibly $150 again, as we did in 2008. I think that is the Iranian strategy: to keep the tension up, the price of oil up, and then get some type of settlement.
