Crude Oil Price - Mar. 1, 2013

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By: DailyForex.com

The WTI Crude markets fell during the session on Thursday, as a general "risk off" vibe hit the commodities markets. This chart looks like one the ones to grind lower, and I did mention previously that I thought the $92.00 level would be somewhat supportive. However, I believe that the market has real support down and $90.00, and that's what traders are looking to test.

With that being said, it makes sense of this market eventually drifts lower. It's probably going to be a bit of a "grinder", instead of some type of free fall, so patients would be required to start shorting this market.

However, I believe that somewhere around the $90.00 level we will have significant buying pressure again. If that's the case, then we would be looking at a potential trading range between $90.00 and $98.00. This looks very possible, especially when you look into the cyclical pattern that this market tends to follow.

Federal Reserve

The Federal Reserve continues to print US dollars hand over fist, and as a result commodity should eventually get a boost. Right now though, people are focusing more on the fact that the Federal Reserve is willing to come into the marketplace and protect everyone, so traders are basically going to focus on the stock market. However, commodities will come back into play once we get a bit of a US dollar weakening. This will happen sooner or later, simply because of the Federal Reserve and its monetary policy.

Demand will pick up over the next couple of months as temperatures warm in the United States, and we get closer and closer to the summer driving season. Because of this, it would not surprise me to see this market go sideways for a while, and then form a base somewhere near the $90.00 level. Beyond that, I see quite a bit of support all the way down to $85.00, so even if we fall below $90.00, I see a massive consolidation area below there that will more than likely keep this market somewhat elevated. Because of this, I believe that the volatility in the oil market is probably going to slow somewhat.

Crude Oil

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.