Summer Seasonality Traps WTI and Brent in Range? Maybe

WTI and Brent Crude Oil

The light sweet crude oil market has been very quiet in early trading on Friday, as we continue to see the $70 level offer a bit of support. This is an area that begins a gap that was formed at the onset of the war between the United States and Iran. So, it’s not surprising that it offers a little bit of a floor. The question now is what happens next with oil?

I think the real answer is probably looked at through the prism of history. We, generally speaking, have a sideways market through the summer, and I think that’s what we’re trying to do: find where we feel comfortable for the next couple of months. I think $67 continues to be the floor. I suspect the 200-day EMA above is resistance.

Summer Doldrums Encourage Range-Bound Trading Setup

The Brent market is somewhat flat as well, and I think, all things being equal, this is a market that will continue to see the market look at the $70 level as a bit of a floor, and ultimately, I think we are trying to find a range here as well. Again, I’m looking, at least for the time being, at the 200-day EMA as a potential ceiling. We’re basically in the middle of that range, so I’m looking to buy dips; I’m not looking to hang on to an investment. I think this is a short-term trading opportunity. I would not put huge positions on and simply accept what the market is willing to give at this point.