The WTI Crude market had a positive session during the Thursday trading hours, as we attempted to break to the $92.00 level. However, that level has provided enough resistance to keep the market lower, but it should be noted that it appears the 90 handle is offering enough support to at least cause some type of reaction.
Was nonfarm payroll numbers coming out today, this market is likely to be pushed around as a typically will react to what people will think of as "potential industrial output", and the form of how many jobs are being added or subtracted from the economy. With that being said, I see quite a bit of noise just above that the $93.00 level. I still think this is a minor area, but it needs to be paid attention to.
The US dollar
In my opinion, a lot of the selloff has been based mainly upon the strengthening of the US dollar. It makes sense if you think about it, as it takes less of those valuable Dollars to buy crude oil. However, there does come a point where the currency and commodity markets will have to take a break. We may be at that juncture right now, and if that's the case we could see a bounce. The bounce as far as I'm concerned could be the setup for a new consolidation area as this market is very technical and its nature.
If that happens, I expect to see a range between $90.00 and $95.00 or so. The fact that we are getting closer to warmer weather in North America also suggests to me that oil prices should be falling for much longer. After all, demand goes through the roof as temperatures rise in the United States.
Adding to the reason mean that I won't short this market is that there is so much noise all the way down to the $85.00 level. With that in mind, I simply think it's going to be an easier trade to go along if we get signal. On a break of the highs from the Thursday session, I think this is telling us to start buying.