The WTI Crude Oil market fell significantly during the course of the session on Wednesday, but having said that the market still found plenty of support below, especially near the $56 handle. With that being the case, the market could be offering a nice buying opportunity as we head towards the jobs number out of the United States.
After all, the jobs number can move the US dollar which of course can move any other commodity market. With fact, as the US dollar strengthens it’s quite likely that the crude oil markets in general will fall. Ultimately, the market then begins to look at the possibility of more demand for oil due to more use from the labor force and factories, and then it turns everything around. Because of this, you will quite often see a lot of volatility after the Nonfarm Payroll Numbers come out in the United States.
Following the course
I believe that the market will continue to consolidate overall, and I think support runs all the way down to at least the $55 handle. With that, I think it’s only a matter of time before we bounce and I am bullish of this market. I don’t necessarily think that looking to break out above the top of the consolidation act as the $62 level seems to be rather resistive. Keep in mind that we are in the middle the summer, and quite often that is a very quiet season for crude oil. Typically, crude oil rises going into the summer based upon more demand coming out of the United States as more people drive, but that has already been factored into the marketplace, as it typically happens in spring. (You’ll notice that the absolute lows were in the middle of March.)
With this, I think we are going to have to wait until the larger market participants come back from holiday, meaning that we will simply continue to consolidate overall. Nonetheless, that makes for nice trading opportunity as we continue to bounce around in this range. Once summer ends, it’s very likely that we will go higher.
