Crude Oil Price- Oct. 8, 2013

The WTI Crude Oil markets fell during the session on Monday, but as you can see found enough support at the $102 level in order to bounce and form a hammer. This hammer of course suggests that we are going to see continued support in this general vicinity, and as a result I am waiting for daily close above the $104 level in order to start buying again. I believe if we get that, we should see the market go back towards the $108 level, and quite frankly there are several reasons why this is more than likely to happen.

This would simply be a continuation of the consolidation that we've seen since July, and on top of that we would also suggest that the US dollar may weaken overall. Not a big surprise really when you think about it considering that the Federal Reserve has put off tapering off of quantitative easing, and that the market is reading the chances of any type of tapering off of quantitative easing before the first half of 2014 as unlikely.

The Federal Reserve will continue to drive oil prices

The Federal Reserve will continue to be the main driver of oil prices, and the whole tapering off situation will be the biggest issue with commodities in general. The market expectation on tapering will continue to be driven by various headlines, so there is always the possibility of a headline shock. The markets will be hanging onto the words of various FMOC members and the hints that they talk about when tapering is concerned. 

The jobs market will be the biggest hurdle to overcome. The nonfarm payroll numbers didn’t come out this past week, and this of course has skewed markets over the last week. This should give the market the chance to react to the possibility of tapering if and when it comes, and this will be reflected in the ability of the market to continue to bounce around in this general range as the markets have been stuck and held hostage by the FMOC since the beginning of summer.

Crude Oil 10813

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.