The price of WTI Crude Oil has moved lower again and is now testing values seen in late August of this year, this as speculators consider fundamentals and behavioral sentiment.
WTI Crude Oil went into the weekend below the 81.000 USD level in the cash and most forward futures CFDs (contracts). The commodity touched a high around 84.780 last week, but this occurred when the WTI Crude Oil market was essentially opening early on Monday and as the week progressed an incremental decrease in price persisted. A solid supply of WTI Crude Oil exists globally and there has been a reduction in the amount of risk adverse trading within the commodity.
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Crude Oil traded slightly below the 90.000 USD mark on the 20th of October this as concerns about the situation in the Middle East reached a fever pitch, but commodity traders are an experienced group of people and when they calmed down the price of the commodity began to trade lower. The giants of Crude Oil production have not had any problems regarding supply, and they likely will continue to work without confrontation if cooler heads prevail.
Global Demand via Economic Outlooks Factors into WTI Crude Oil Price
The ability to hover above the 80.000 level in WTI Crude Oil may look like a tempting place to buy the commodity to many speculators. The energy source may look oversold considering the potential of greater demand, speculative buying and the ever present danger of developing news in the Middle East to cause noise is problematic. Yet, the commodity spent November of last year until the end of July this year, trading a large percentage of its time below the 80.000 USD mark.
- While the U.S economy continues to show signs of life and produce statistical growth, Europe and Asia are being confronted by lackluster economic data, meaning manufacturing may not fuel heightened demand over the mid-term.
- However, India and China are massive users of Crude Oil, and while certain economic data from China falters it does continue to work. Meaning there is also a probable support level regarding price for the commodity which will be found.
Risk Appetite and WTI Crude Oil
Technically the price of Crude Oil has declined since the 20th of October and has certainly come off highs seen in late September when the commodity flirted with the 94.000 USD level momentarily. While the past few weeks of trading have seen a high degree of risk-averse conditions in the global markets, there was a clear sense of risk appetite showing its teeth in equity indices which began last week. The question is if this will extend into the speculative boundaries of WTI Crude Oil.
Outlook for demand regarding energy will likely be influenced by major purchasers like China and other major nations that consume. It is possible that lower prices of WTI Crude Oil could lead to some buying from commodity houses which believe it is a good time to buy and build inventory. However, the trend lower the past month when September’s highs are considered is troubling for speculative bulls.
WTI Crude Oil Weekly Outlook:
The speculative price range for WTI Crude Oil is 73.750 to 89.700 USD.
As always the price of WTI Crude Oil is highly speculative. Day traders wanting to wager on the direction of the commodity need to use solid risk management and have legitimate targets as take profit orders. Any type of surprise negatively from developing news in the Middle East could affect the value of WTI Crude Oil. However, the commodity has traded below the 80.000 USD mark before and this has occurred within the mid-term regarding technical timeframes.
If WTI Crude Oil begins to challenge the 80.000 USD level early this week it could be a sign the energy could slump lower, this while commodity companies search for equilibrium. For the moment any price above the 85.000 to 86.000 levels look overvalued for WTI Crude Oil. And speculators who believe the commodity is oversold may want to keep much more conservative upward targets in mind this week, by simply looking for a push over the 81.000 mark and a potential move towards 82.000 USD.