With the Americans and Canadians celebrate Labor Day, a massive part of the trading community would have been gone as far as this particular contract is concerned. However, as you can see we are bringing up against the $96.00 handle, an area that I think is significant resistance. I believe that the area goes all the way up to the $96.50 handle at the very least, and as a result it would not surprise me at all if we struggle going forward.
However, we do have the ISM Manufacturing PMI numbers coming out today, and that can have a direct effect on the perception of demand when it comes to petroleum. With that, if we get a better than anticipated number, it’s very likely that this market will rise and perhaps head towards the previous consolidation area on a move above the $96.50 level. If that’s the case, it’s probably only a matter of time before she $98.50 in my opinion.
A lot of moving parts, it’s only a matter of time.
It’s difficult to short this market for anything more than a short-term trade now. This is mainly because the market has fallen so much recently, and we do have things such as Russian troops in the Ukraine. There are also a lot of problems in the Middle East currently, and it’s only a matter of time before oil markets in general take notice. Quite frankly, I believe that part of the reason they having is that the major firms still have most of their senior traders away a holiday. Because of this, there hasn’t really been any real “true action” in this marketplace recently.
I get the sneaking suspicion that by the time we get to the end of this week, we will have some answers when it comes to geopolitical risks, demand, and employment in the United States. All three of those areas could cause demand to rise or fall way comes to the WTI market. However, I think the real risk is to the upside at this point.
