Crude oil markets initially went sideways, but as the Americans stepped on board, they started selling oil hand over fist. It looks as if we are going to continue to struggle, as the $70 level above has offered significant resistance of the last several sessions in the WTI grade, and of course we have corresponding action in the Brent market.
WTI Crude Oil
The WTI Crude Oil market broke down as traders came back to work in America on Monday, slicing through the $60 level. There is a significant amount of support at $66 level as well, and of course the uptrend line underneath is even more supportive. I think that the market will continue to find buyers eventually, but we may have gotten a bit ahead of ourselves to the upside. The US dollar has been strengthening during the trading session on Monday as well, so it makes sense that oil would show a bit of softness.
Brent
Brent markets fell during the trading session as well, using $74 as far too much in the way of resistance. I think the $73 level should offer support, and I think that if we break down below there, the market should then go down to the $72 level. After that, the $70 level is even more supportive. I think that it’s only a matter of time before we find the buyers at one of these levels underneath, and I think that the uptrend line below there is even more supportive. I believe that the market should then go to the $75 level, which has been resistance. Ultimately, I think that buying value is probably the best way to look at this market, so as we pull back like this it’s probably best to stand on the sidelines, and then wait for an opportunity.
