The WTI Crude market had a slightly negative session on Tuesday, continuing the lack of bullishness that we've seen over the last three days. The candlesticks for Friday and Monday both look very shaky at best, but I do see significant support at the $95.00 level. Going forward, I believe that this market is trying to run out of steam and start falling again, but until we get a close below the $95.00 level, I would be a bit hesitant to short this market.
Alternately, there is the possibility that we could continue higher. If that happens, I firmly believe that the resistance area near the $98.00 level should contain this market. In fact, I believe that area extends all the way down to the $97.00 level, which you can see of course on Monday repelled price for the second day in a row.
On the downside, I think that the support level near the 92.50 dollars level should continue to keep this market somewhat elevated. However, there is even more significant support now at the $90.00 level as well. Going forward, I think this means that we will continue to see choppiness in this marketplace, and this makes sense of course as we certainly had into the slower summer months for traders.
Range bound, and I don't think it's going to change anytime soon
I think this range bound action should continue through the majority of the summer, barring any type of shock to the system coming out of the newswires. More than likely, if we’re going to see if it will be out of the Middle East, as we see plenty of possibilities for an escalation of armed conflict at the moment. With the Israelis recently striking Syria, and the Americans claiming that a "red line had been crossed with the use of chemical weapons", there is the possibility of expansion of the armed conflict that we have seen in Syria for the last couple of years. Beyond that though, I don't see a catalyst for oil prices to explode to the upside.