Crude oil markets encountered some uncertainty during Monday's trading session as they attempted to rise but eventually showed signs of hesitation.
The West Texas Intermediate Crude Oil market tried to rally on Monday but couldn't sustain its gains, similar to Friday's performance. The primary reason behind the market's upward pressure is the production cuts implemented by the Russian and Saudi Arabian governments, which collectively reduced production by over 1 million barrels per day. This has been driving the market higher for an extended period. However, it appears that momentum might be fading, considering the market's prolonged one-sided movement.
Support for this market lies at the $90 level, with additional support from the 50-Day EMA just below the $85 mark. Given the current situation, it's advisable to keep an eye out for potential pullbacks that could present buying opportunities. Afterall, the overall fundamentals in this market are going to remain bullish. The market may need a bit of a pullback to build more momentum, but it should be just that – a pullback, and not a major change of direction.
Traders May Find Opportunities in Potential Pullbacks
- The Brent crude oil market also attempted an early rally on Monday but eventually retraced its gains.
- Below, the $90 level continues to provide significant support due to its psychological importance.
- A break below this level would be concerning, but it's worth noting that the 50-Day EMA is approaching this area, potentially forming a strong support zone that many traders would find appealing.
On the upside, the $95 level presents substantial resistance. If the market manages to break above this point, it could pave the way for a move toward the $100 level. However, achieving this milestone may require a slight pullback to attract more buyers. It's important to emphasize that, given the bullish trend in the oil market, there's currently little interest in selling oil.
In conclusion, crude oil markets are grappling with hesitation despite previous bullish momentum, largely driven by production cuts from Russia and Saudi Arabia. While key support and resistance levels offer guidance, the market's direction remains uncertain. Traders may find opportunities in potential pullbacks, but it's essential to remain vigilant in these conditions. The markets continue to be volatile, but overall remain very bullish, and should continue to be so in this set up. I have no interest in shorting.
Ready to trade the WTI/USD exchange rate? Here’s a list of some of the best Oil trading platforms to check out.