- The month of June was very volatile for the crude oil markets worldwide, as Israel and Iran going to war obviously causes quite a bit of heartburn when it comes to crude oil supply and how people will look at pricing it.
- That being said, we have since seen the Israelis and Iranians agreed to a cease-fire, and all of that volatility and massive move to the upside has simply rolled right back over.
- In other words, we have seen the market rally all the way from $65 to the $79 region or so and then drop right back down to the $65 level again. June has been an absolute migraine inducing environment.
Are We Recovering Finally?
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I have a little bit different take on the crude oil market at the moment than most people. What I’ve noticed is that there is a significant amount of hesitation near the $65 level, and that is an area that previously had been significant resistance over the course of about 2 months. The market finding a bit of sideways action in that region makes a certain amount of sense because of the “market memory”, but I also believe that crude oil was trying to break out to the upside before conflict broke out between Iran and Israel. That ended up being the catalyst to really get things moving, but now that we are back where we started, I think they are looking to recover a bit in the month of July.
This doesn’t necessarily mean that we take off to the stratosphere, but I think what it means is that the market is going to continue to grind higher more than anything else. Cyclically speaking, this is typically a very positive time of year for crude oil, and unless we get some type of external shock over the next month, it’s likely that we will start to focus on that again. After all, demand picks up in the United States, as well as the European Union during the summer, all things being equal. I am bullish, but I also expected to be a very choppy and slow grind higher.
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