- The crude oil market has fallen as we continue to see a lot of negativity out there.
- The Light Sweet Crude market will continue to see a lot of noisy behavior in general, as we have seen a lot of conflicting headlines out there that could continue to throw the market into a bit of disarray.
OPEC
OPEC is a major player in the market as far as where the direction will go, and it had recently announced that it was going to produce 500,000 more barrels of crude oil per day, and therefore it should increase supply quite nicely. This is interesting, it considering that the United States is presently producing more crude oil than it ever has per day, so in other words, the market is absolutely flooded with supply.
The $65 level underneath will continue to be very important as support, and of course we also have to keep in mind that this time of year we typically have some type of overall bullish behavior and via a bit into the market, so I think short-term pullbacks will continue to be opportunities that people can take advantage of, but they also have to be cautious due to the fact that there is a lot out there that could continue to work against the value oil. Not only do we have the OPEC issue, but we also have to keep in mind that recently we have seen economic numbers that suggests that perhaps the United States might slow down. If that’s going to be the case, the market is likely to continue to drop.
If we were to break down below the $65 level, then it’s likely that the market will probably continue to go lower, reaching toward the $60 level. On the other hand, if we bounce from here, then I think we are just going to continue to hang around the same consolidation age that we had been in for a while, and with that being the case, I think we just continue to see range bound traders getting involved.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.