- The light sweet crude oil market went back and forth in the early hours of Tuesday, as we are trying to find a bottom in this market.
- The crude oil market continues to have a lot of issues surrounding it, as there are a lot of questions about the oversupply of oil from places like the United States, Russia, and OPEC.
- This, of course, is balanced by the potential economic slowdown globally, which obviously will work against the idea of higher pricing overall. However, we will likely be very noisy in general.
Technical Analysis
The technical analysis for this market continues to be very negative overall, but we are approaching a serious support level in the form of the $55 area. This is an area that the market has shown itself to be supported previously, as we had formed a double bottom in April and May. This is an area that must hold if we are to see the market have any chance of either recovering or at least going sideways.
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We are currently in a potential range, with the $55 level being the floor in the market, and the $60 level above being a potential ceiling. This is an area that I think could contain the market for a while, and with this, I will be looking to see if we can react to those levels, for a potential rangebound play. The shape of the previous two candlesticks on the daily chart are hammers, so it looks like there is a real fight going on here, suggesting a potential short-term bounce. This allows for a chance to get long from time to time, but I think it would be difficult to get above the $60 level. If we did, it could open up much stronger pricing in this market, but right now, I think you are looking at a situation where are likely to go back and forth in general.
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