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Crude Oil Price- Dec. 19, 2013

The WTI Crude Oil markets went back and forth during the session on Wednesday, as we continue to meander around the $98 handle. The $98 handle has shown a significant amount resistance lately, but I don’t necessarily think that it’s any type of major blockade for the buyers, it’s just simply the fact that we’re getting towards the end of the year. End of the year means no liquidity, and as a result it’s difficult to get any real traction in one direction or the other. However, that’s not to say that there wasn’t a few headlines to deal with during the Wednesday session.

The FMOC announced that it was cutting back on quantitative easing, albeit just slightly. On the other hand, it suggested that interest rates will remain low for an extended amount of time, which was a little bit of a surprise. Because of this it was a bit of a 50-50 announcement, while it is strong for the US dollar, it’s also weak as low interest rates won’t do it much favors. However, the fact that that the Federal Reserve feels it needs to keep it straight lower for a longer period of time does suggest that we could have an issue with demand when it comes to oil. Because of this, I feel that the market really didn’t know what to do in this particular situation, and basically took a Mulligan.

Range bound until the end of the year

I still believe that this market will be extraordinarily range bound until the end of the year, and be a marketplace where only scalpers will dare to tread. We have a very tight range going right now, and to be honest I would be much more comfortable buying at lower levels, perhaps a pullback the $95.50 level. With that being the case, I believe that a buying opportunity will present itself, but I do not know if it’ll happen between now and New Year’s Day. The futures markets tend to be very illiquid, probably even more so than the Forex markets this time year, so therefore this is a market that I will be watching more than trading.

Crude Oil 121913

Christopher Lewis
About 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.

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