Crude oil markets have done very little during the trading session on Tuesday, as we are looking for some type of momentum to go higher. After all, you must keep in mind that OPEC is cutting production, and a lack of 1 million barrels coming out of Saudi Arabia will certainly continue to have an effect.
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The WTI Crude Oil market could outperform in the short-term, since the Gulf of Mexico could have some inclement weather, thereby shutting down a little bit of production. Either way, I think you can break above the $85 level, it’s likely that we could go investigate the $92.50 level. If we can break above there, then it’s likely that we will go even further than that. On the other hand, if we turn around and break down below the hammer from the trading session on Monday, then we will more likely than not break down toward the 200-day EMA near the $73.70 level.
As far as the Brent market is concerned, it is going to be very similar, as we are sitting on top of the 50-Day EMA, and possibly reaching toward the $87.50 level. If we were to break above the $87.50 level, it is possible that the market could go looking to the $100 level. The $100 level course is a large, round, psychologically significant figure, which is an area that I think also would have a lot of interest in it as there is probably a major options barrier.
There’s Going to be a lot of Upward Momentum
- Underneath, the 200-Day EMA sits right around the $77.50 level, and therefore I think that offers a little bit of a support level, so if we were to break down below there, then it’s likely that we could go down to the $75 level.
- If we break down below there, then it’s likely that we go even lower.
- However, there’s so much in the way of support that I just don’t see how the oil market rates down.
With OPEC cutting back production and the Americans having to refill the Strategic Petroleum Reserve storage, there is likely going to continue to be a lot of upward momentum, and therefore I think it’s probably only a matter of time before we go higher. It doesn’t necessarily mean that’ll be easy, but the upward momentum has been the most consistent over the last several weeks.
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