The crude oil markets were very noisy during the trading session on Tuesday, essentially going nowhere but just bouncing back and forth.
The WTI Crude Oil market rallied a bit during the trading session on Tuesday, reaching above the $57.50 level at one point, but then pulled back a bit. I think we are going to continue to try to go higher, but there is a lot of noise in this general vicinity, so I don’t read too much into it. On a break above the $58 level, I would be a bit more impressed. In the meantime, I suspect that we are going to go back and forth, bouncing around with a serious lack of direction. Alternately, if we break down below the $56.50 level, then I think the market could drop towards the $55 level underneath.
The Brent market did very much the same, as we chop around, but ultimately didn’t make up our collective mind. With the Crude Oil Inventories announcement coming out of the United States today, it’s likely that we will get a catalyst to move in one direction or the other. If we can break out to the upside and above the $64 level for any length of time, we could go to the $65 level next. Alternately, if we break down below the $63 level, the market probably drops to the $62 level after that. I suspect that this market is going to continue to be very choppy and difficult to deal with, but will probably struggle to make a significant move during this time a year as most traders will be focusing on the holidays, and not the oil markets. Expect noisy and difficult conditions going forward, so keep your position size small.