WTI Tests $93 as Persian Gulf Risks Fuel Oil Volatility

WTI Weekly Technical Analysis

The light sweet crude oil market has been very positive this week, jumping as high as about $93 at one point. We have given some of that back, but at this point in time, it’s hard to imagine a scenario where I want to get overly bearish on crude oil. That being said, headlines come out all the time, it seems, that move the markets, and the situation in the Persian Gulf, of course, is going nowhere.

Because of this, it’s going to be a market that I believe will remain very noisy and very erratic. Longer-term traders probably have a really hard job ahead of them. So, with this, it’s likely to be a scenario where you’re just going to have to react to the latest headlines.

Right now, we’re basically in the middle of the range since the war, as it’s been as high as about $120 at one point. I’m calling it $115, as we couldn’t sustain a move above there, and a floor right around $70. We find ourselves pretty close to the center.

Brent Weekly Technical Analysis

The Brent markets have the same scenario as well, as we are basically threatening the $95 level as I record this. The market will remain one of those that I believe is going to be very hesitant, I believe, in getting overly aggressive in one direction or the other, just simply because 5 minutes from now, a headline could come out that completely disputes whatever had been going on.

The supply constraints are a very real problem, and that is something that I think you’re going to have to be very cognizant of in this environment. But, at the same time, oil is getting through.

So, this is a very difficult situation to be in. Longer-term traders, best of luck to you. I don’t think clarity is on your side. Even longer-term traders probably have to go to shorter-term charts to at least get their entries and exits.

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