WTI Crude Oil
The WTI Crude Oil market fell rather hard during the trading session on Monday, dropping towards the $50 level. This is an area that obviously causes quite a bit of psychological concerns of the market, it should be supportive. However, with the type of selloff that we have seen it would not be unheard-of to see this market breakdown below that level, and continue even lower. I believe that we break down below the $49 level, the market will continue to go much lower at that point, as it would show complete capitulation by the bullish traders. I still think longer-term we have significant oversupply issues, and this seems to be more of the same. Volatility will continue to be very high in the petroleum markets, with the WTI markets having a bit of a market cap at $55.
Crude Oil Video 03.10.17
Brent
Brent markets have fallen as well, testing the $55.50 level. I think that we will probably breakdown below $55, then go looking towards the $52.50 level. I think rallies at this point should be looked at with suspicion, especially after the last couple of trading session. If the US dollar continues to pick up strength, that of course will work against the value of Brent as well. Keep in mind that this market is just as volatile as the WTI market, which of course is suffering from oversupply and jawboning by OPEC nations. Ultimately, I believe that this market will be very difficult to navigate unless you have smaller positioning or perhaps using options could be your best route to go forward. With this type of volatility, the markets can be a very dangerous place. Keep your position size lower, as we continue to see a lot of noise in pricing crude oil.
This article was originally posted on FX Empire