Crude Oil Price - April 18, 2013

The WTI Crude market fell during the session on Wednesday, breaking below the $87.00 level. Within this chart, you can see that in the after hours we are continuing the weakness, and a break of the $86.00 level wouldn't be surprising, and it would be very bearish.

However, on the longer-term charts there is a symmetrical triangle trying to build itself up around here, and that trend line comes through at roughly the $85 level. With that being the case, we really can't get alter bearish on this market until we break below the $85.00 area on a daily close. In the meantime, I am on the sidelines now but looking to get involved based upon either a breakdown, or some kind of massively supportive candle at the $85.00 handle.

Watch OPEC

We aren’t there quite yet, but it's only a matter of time before OPEC start complaining about the price of oil. My suspicion is that we will make a serious breakout at this point, and I am surprised at how quickly the commodities space has completely unraveled. There are fears of deflation out there now, and as long as that's the case we could see a serious rout of commodities in general. If that's the case, we will see continued weakness in not only the WTI market, but gold, silver, and just about everything else.

I think that there will be bounces from time to time, but those bounces will more than likely be selling opportunities going forward. This will be especially true if we get below the $85.00 level, which would change the complexion of this market completely. We are getting close to the warmer months, and as a result we will try to find some type of range sooner or later, but in the meantime it does look like we will have a fairly active market.

There was a slight draw down of oil inventories in the United States during the Wednesday session announcement, but to be honest it wasn't enough to really move the market in a positive direction. The demand for gasoline and crude oil both are starting to drift lower, which is nothing but bad news for the buyers.

Crude Oil

Christopher Lewis

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.