The WTI Crude Oil markets had a strong showing on Wednesday, breaking above the top of the shooting star from the Tuesday session. This of course is a very positive sign, and as a result I believe that this market is going to try to reach the $102 level in the short term. Ultimately, I believe that this is a bullish market anyway, but the fact that we have broken above the top of that shooting star suggests that shorter-term buyers have come back into the marketplace and are now in control of this market.
On top of that, oil inventories in the United States are shrinking slightly. Because of that, it should continue to put pressure on the oil markets to the upside, as demand appears to be picking up slightly. The $102 level of course will be resistive, but we need to see whether or not we can get above there before we start to think along the lines of a long-term move.
Don’t forget Russia either.
You shouldn’t forget Russia either, as they will certainly have a large part to do with what happens next in the oil markets. After all, they are a major exporter of oil, and as a result I feel that this market will more than likely continue to have headlines push it higher as the situation in the Crimea continues. Because of this, it’s very likely that the market will offer quite a few buying opportunities from the short term charts as headlines continue to come back and forth into the marketplace. It’s really difficult to imagine something coming in the marketplace and since oil lower for any significant amount of time, so therefore I feel like it’s essentially a “buy only” market right now.
If we can get above the $105 level, this market will simply become very bullish. However, I have to ask whether or not we aren’t simply carving out some type of range at the moment either, after all oil markets tend to be very range bound during the summer months in North America.