- The crude oil market gapped lower to kick off the trading session but then fell apart as we continued to see a lot of downward pressure in this market.
- The $55 level is an area that is very important and supported.
- So, I think when the market looks at the $55 level, they see it as a major barrier and that if we give it up, the market could drop another $15 a barrel.
We are trying to fight back though. And with that being the case, I also believe that the market, perhaps bouncing from here, offers another shorting opportunity. With this being the case, I'm looking at the $60 level as a nice selling opportunity and this situation right here, I think you've got to look at this as a market that really at this point in time is still trying to figure out whether or not the global economy is actually going to fall apart or if the market is just simply trying to price in over supply, there is a difference. And of course, OPEC oil production is through the roof. The US and Russia is the same story.
Supply and Demand Remain an Issue
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So over supply, obviously not good for pricing. If we're trying to price in some type of economic collapse, though, then you've got a situation where if we do bounce, think sellers will come in. If we break down below 55, then it's really ugly. Ultimately, this is a market that I think is likely going to be a market that might get a short-term bounce, but I'm looking to step on any signs of exhaustion. There's just nothing seemingly able to come into the market and lift oil over the last couple of weeks. And this is the type of move I think probably continues to see some effort applied to it.
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