- The West Texas Intermediate (WTI) crude oil market displayed some early choppiness on Monday, reflecting the recent turbulence it has endured over the past few sessions.
- The central question at this juncture is whether we will discover sufficient support within this range to maintain stability.
- The dynamics at play in the crude oil market have been notable, particularly the sharp downturn following last week's press conference.
- This is an interesting turn of events, showing that a lot of the bullishness was due to the idea that the Fed was going to pump everything up again – and no so much on fundamentals.
Many traders had anticipated that the Federal Reserve's loose monetary policy would spur increased demand for crude oil. However, the reality seems to have fallen short of these expectations. Nevertheless, there are compelling reasons to believe that we might be closer to the bottom of the price range rather than the top, especially around the $68 level.
Support Below
Beneath the current market position lies a substantial support level extending down to $65. Additionally, geopolitical tensions in the Middle East are ongoing, and the potential for supply disruptions remains a real possibility. OPEC could respond by reducing its supply in response to these challenges. Given these factors, it appears that the market favors buying on price dips.
It's important to exercise caution when entering positions in this market. Crude oil has demonstrated its ability to move swiftly, and it is crucial to avoid being caught on the wrong side of a substantial sell-off. In general, the crude oil market is still in the process of defining its range for the year, and as a result, we can anticipate a period of considerable volatility in the weeks ahead.
In this type of trading environment, it is prudent to manage your position size diligently and implement appropriate risk management measures to safeguard your account from potential losses during periods of heightened market volatility. Maintaining a disciplined approach and staying informed about market developments will be essential for traders navigating the crude oil market in the coming weeks. This is a market that will be dangerous if you choose to trade with huge positions, please remember this as it can be very detrimental to your account if you are not careful.
Ready to trade our WTI Crude Oil Forex? We’ve made a list of the best Forex Oil trading platforms worth trading with.