- Starting with WTI Crude Oil, the market witnessed an upside gap on Monday following OPEC's decision to cut over 1 million barrels per day.
- This move was aimed at bolstering oil prices, which have been grappling with concerns surrounding the global economy's next phase.
- The anticipated drop in oil demand looms as a significant challenge. Having filled the gap, the market now awaits the actions of buyers to determine the next course of action.
- It will be intriguing to observe how events unfold in the coming days. However, traders should exercise caution, given the prevailing circumstances.
If WTI Crude Oil manages to surpass the high point of the Monday candlestick, it paves the way for a potential move toward the 200-Day Exponential Moving Average. Additionally, the $70 level could prove to be a crucial support level. Only time will reveal the ultimate outcome of any psychological effect, and of course any option barriers and how those affect the markets overall. This is a market that has a lot to think about now.
Be Cautious
Shifting our focus to Brent, a similar pattern emerges. Brent markets also experienced an upside gap, testing the 50-Day EMA before retracing slightly. This indicates an ongoing struggle for Brent to advance, despite OPEC's concerted efforts to provide support. Consequently, volatility is expected, and further market follow-through remains uncertain. Should the day's candlestick breach its upper boundary, a highly bullish scenario would unfold, likely propelling oil prices toward the $80 level initially. However, if a decline materializes from this juncture, it could spell trouble for Brent. The market may test the recent bottom range, which would have dire consequences for pricing dynamics. The fact that OPEC's additional cut of one million barrels per day hasn't yielded the desired outcome raises questions about the efficacy of buyer intervention.
Ultimately, the recent market developments in WTI Crude Oil and Brent have brought forth a mix of possibilities and challenges. The response of buyers and subsequent market movements will be crucial in shaping the future trajectory of oil prices. Traders should approach the situation with caution, considering the uncertainties surrounding global economic conditions and oil demand. As the oil market continues to evolve, it remains essential to closely monitor the developments and be prepared for potential shifts in pricing dynamics.
Ready to trade WTI/USD? Here are the best Oil trading brokers to choose from.