Crude Oil Price Analysis – Oil Continues to Have Erratic Moves

WTI Crude Oil Technical Analysis

The light sweet crude oil market gapped straight up in the air at the open on Monday, but has since seen quite a bit of volatility. I think at this point in time, it’s obvious that it’s mainly a reaction to the restarting of some hostilities in the Middle East, and that has people concerned yet again. As per usual, it’s all about the Strait of Hormuz and whether or not it’s blocked.

The $90 level above seems to be offering a little bit of resistance, but if we can break above there, it could open up a move to $95. Currently, we’re just hanging around the 50-day EMA, and I think, honestly, a lot of traders are just exhausted at this point.

Brent Market Technical Analysis

The Brent market looks very much the same, it’s just kind of going sideways for a while and it looks like the $96 level is a bit of a magnet for price. $95 is short-term support. Underneath, we have the 50-day EMA closer to the $91.55 level.

I think this is a market that is more or less buy on the dip but I also recognize that it’s going to move on the latest headline and therefore it’s very dangerous. The $100 level above is a major barrier that’s going to be difficult to break. If we can break above there, then we could go towards the $108 level, but that would take bad news out of the Middle East.

In the short term, I think we just chop back and forth. The market, quite frankly, has been burned in both directions, so it doesn’t surprise me that there’s some hesitation here.