During Monday's trading session, the West Texas Intermediate Crude Oil market rallied a bit, but we saw a lot of noisy and choppy behavior in thin volume, due to the Presidents’ Day holiday. This market continues to see a lot of choppiness as we are in the middle of a major consolidation area. Due to this, we should not be surprised if we have a less-than-straightforward move ahead. There are many questions being asked about whether or not there will be enough global demand for crude oil pickup, making it likely that we would see confusion.
Crude Oil Waiting for the Next Catalyst
At this point, we should anticipate back-and-forth trading more than anything else. With that being the case, we are probably going to be better off looking at this through the prism of a range-bound system. Most range-bound traders love crude oil at the moment, but eventually, we could break out of this range. The $82 level above has been the ceiling, with the $72 level underneath being support. If we can break out of there, we can move up by about $10. Until we get some type of catalyst, that's going to be difficult.
In summary, during Monday's trading session, the West Texas Intermediate Crude Oil market rallied a bit, but we saw a lot of noisy and choppy behavior in thin volume. We are currently in the middle of a major consolidation area and may see a less-than-straightforward move ahead due to questions about global demand for crude oil. We should anticipate back-and-forth trading, and we may be better off looking at this market through the prism of a range-bound system. If we can break out of the current range, we may move up by about $10. Until then, breaking out of the range will be difficult without a catalyst.
- Overall, I anticipate that the market will continue to see a lot of hesitation, but if you are focused on short-term charts with perhaps using the Stochastic Oscillator, you may do quite well.
- While we do not know where the markets are going to go next, the reality is that even though there is relatively tight supply, if there are not enough buyers out there, it won’t matter.
- Furthermore, Russia seems to be able to sell oil to India and China, and as a result the flow of crude oil continues, despite the sanctions by the West.
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