Crude oil markets fell slightly at the open on Monday, perhaps in a reaction to the unlikelihood of an escalation in Syria, at least in the short term. This was something that a lot of traders were worried about over the weekend, and that could have been one of the main reasons we rallied last week.
WTI Crude Oil
The WTI Crude Oil market broke down a bit during the trading session on Monday, reaching towards the $66 level before having a bit of a bounce. I think we might be slightly overextended, so a short-term pullback may be possible. If we broke above the $67.50 level, then I think the market goes closer to the $70 level. Ultimately, I also look at the uptrend line on the chart as a bit of a floor in this market, so I think that shorting this market is something that you can do, but you must be very cautious and perhaps use a small position.
Brent
Brent markets did the same, pulling back towards the $71 level during trading. I think there is significant support at the $70 level underneath. The uptrend line underneath should continue to be important as well, so I think that it is probably best to wait for a short-term pullback to take advantage of to the upside rather than anything else. The alternate scenario of course is if we can break above the $73 level, then I think the market is free to go to the next psychologically important level in the form of $75. It is possible that we may see oil markets rally a bit more due to sanctions on Russia, but I think in the short term this is going to be a very difficult market to gauge correctly, so I would use a small position regardless.
