- The West Texas Intermediate Crude Oil market has tried to rally a bit during the session on Monday, but gave back gain as it looks like we are threatening the $85 level.
- If we were to break down below the $85 level, then it’s possible that we could see this market go even lower.
- There are a lot of moving pieces at the moment, but it certainly looks as if we are at the very least slumping.
Will the Crude Oil Break Higher in the Next Days?
That’s not to say that we are not possibly forming a bullish flag, but Tuesday better be of bullish day if you think there’s any real chance of that kicking off. OPEC has cut 2 million barrels of production per day, and therefore I think a lot of people will be focusing on that. However, at the same time you can say that the market will continue to be worried about a lack of demand as well, especially as the Federal Reserve continues to tight monetary policy. With that being the case, the market is likely to continue to be pulled back and forth, as there are conflicting visions of what could happen.
If we turn around and break above the 50-Day EMA, then it’s possible that we could go quite a bit higher as a break of the $90 level which show a reassertion of what we had previously seen on the bounce. At that point, the 200-Day EMA is sitting right around the $93 level and that would be a target. On the other hand, if we break down below the $85 level, then it’s possible that we could see a significant move lower. At that point, I think the $82.50 level gets targeted, followed by the $80 level.
We are most certainly at an inflection point, so we will have to see how this plays out, but certainly I think given enough time we should see some type of impulsive candlestick in order to get involved. While there are a lot of concerns about supply as OPEC is doing everything it can to lift prices. Furthermore, we have a lot of questions about Russian energy, so regardless of what we get next, it’s going to be an extraordinarily volatile market, you will have to keep that in mind as well. Keep your position sizing reasonable.
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