The crude oil market continues to see downward pressure, as we are drifting lower overall. However, there are buyers underneath current levels, but on top of that, we are probably oversold.
WTI Crude Oil
The crude oil market did rally just a bit during the early part of the trading session here on Friday, but let's keep in mind the crude oil markets would have been trading in a relatively thin environment in shortened hours because it was Juneteenth in the United States. That has a major influence on how things behave. It's not a read too much into the price action.
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I think what we're seeing here is an inverted hammer followed by a hammer, followed by the slightly bullish action on Friday. It's possible that we are trying to consolidate between the 200-day EMA on the top and maybe somewhere around $73 on the bottom. Even if we fell from here, I think the $70 level also offers support.
Supply Dynamics and Market Ranges
We are getting oversold and a reaction to the idea of peace, but let's not get it completely confused here. There are concerns about supply going forward. It's not magically fixed because we stopped fighting in the Middle East, so I do think a rally makes a certain amount of sense.
I'll be looking to fade the first signs of exhaustion, though. But I think just falling apart right here, I think it's somewhat limited.
Ultimately, I think we probably try to find the next range. It might be between $70 on the bottom and $85 on the top, but that's more like a summer range. In the short term, I think it's even tighter. I think it's between basically $73 and the 200-day EMA. So expect a lot of choppy back-and-forth behavior, look for range-bound systems to deploy.
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