Crude Oil Price - Feb. 28, 2013

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By: DailyForex.com

The WTI Crude market went back and forth during the session on Wednesday, and continued to straddle the $92.80 level that has been a fulcrum for the market lately. As you can see, we have been bouncing off the $92.00 level, and it seems to be offering significant support. Because of this, I feel that although there is a definite bearish tone to this particular market, falling from here will take a little bit of a "push."

I think that the $90.00 level is significant support as well, and once you get to that point in time you are starting to see significant support all the way down to $85.00 as well. Because of this, I suspect that if we fall down to that level we will see consolidation. I fully expect to see this market consolidate overall, and it must be said that oil markets are extraordinarily well-suited for technical analysis. You can often see the markets bounce around in a $10.00 range at the handles.

Is there any demand?

The demand part of the equation has been a little bit fishy lately, and as a result I begin to wonder whether or not this is a demand driven equation, or to simply a reaction to an ultra-easy Federal Reserve. I believe the latter of the two is probably more than likely going to be true, and as a result I think the fact that Federal Reserve Chairman Ben Bernanke suggested that monetary policy is going to remain easy for the foreseeable future during congressional testimony this week should eventually push his market higher. After all, it is just simply one more reason to not be in the US dollar.

Crude Oil

Going forward, I expect to see a drop to the $90.00 level, but a bounce from their and consolidation between $90.00 and $95.00 as temperatures rise in the United States. As we start to get into the driving season, I believe that we should see this market hang around those areas, and then gradually drift towards $100.00 during the summer as peak demand comes into play.

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.