Crude Oil Price - May 3, 2013

The WTI Crude market had a very strong showing during the session on Thursday, reclaiming all of the losses that we found in this marketplace on Wednesday. Ultimately, we close right around the $94.00 handle, and this of course suggests that the $95.00 level above will continue to be resistant as well. This market looks like it wants to grind away in this general vicinity, and quite frankly if you are trading the futures market - you're probably a nervous wreck at this point.

I highly recommend trading this CFD market if you have the possibility of doing so. This is because you can cut the position size down enough in order to take some of this volatility out of the equation. The futures markets of course are standardized contracts, which mean that they cannot be caught in order to make the trade a bit "safer."

Going forward, I think that the nonfarm payroll number today will have a drastic effect on this market, as it normally does. The United States and whether or not they are hiring in that country greatly affects the perception of industrial output, and more importantly in this case industrial fuel demand. Obviously, that is a major component of what goes on in this marketplace, and as a result taking a trade before the nonfarm payroll announcement is gambling at best.

We need to find the summer range

Normally, the summer time brings in range trading for this market. It looks like we are trying to find that area now, but quite frankly it so volatile many traders will probably be getting out of the market now instead of waiting for their summer breaks. Simply put, you cannot drop 3/2% during the day on Wednesday, in turn around and do the exact opposite of that during the next session. Because of this, the volatility is certainly keeping a lot of traders on the sidelines which of course could be exacerbating the moves in the first place. With that being said, I think that 95 should be a bit of a barrier, but now it starts to look as if the $90.00 level is going to be a barrier as well.

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.