- The light sweet crude market has exploded to the upside during the trading session here on Thursday as new sanctions have been announced against Russian oil producers.
- That being said, the reality is that we've seen this game before, and we are approaching an area that has been important multiple times.
- With that being said, I think the market participants continue to look at this with a little bit of hesitation.
Keep in mind that we're right here at the 50-day EMA. And although oil has jumped 6 % in very short order, the reality is we've seen sanctions against Russian companies before, and that doesn't seem to change much. I think you had a situation where the market was oversold, and now it was just the excuse to get a bunch of short covering out of the way.
Volume Looks Good
Nice volume during the day, admittedly, but we still have a long way to go before the trend actually changes. I do find it interesting that towards the end of the open outcry session, we are right around the $62 level, an area that previously had been significant support and now looks to be significant resistance. A little bit of negativity here could go a long way. We'll just have to watch and see how that plays out. If anything happens to the market and it drops below $60, that could crater crude oil.
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A move above the $62.50 level would be extraordinarily positive. But really, at this point, I think you have to look at this as a market that, although it was a very bullish move, you have to see if there's any follow-through. 6 % in a day for crude oil is a big day. But it's also worth noting that everybody was leaning on one side of the market. So I do think a certain amount of this was basically short covering. If we get a little bit of exhaustion in this market. I'll probably look forward to selling it.
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