- Crude oil fell sharply on Wednesday amid renewed market panic and persistent instability.
- Despite Russian sanctions, supply remains resilient while global demand weakens.
- Prices could test support near $55–$56 unless they break above $62, keeping short-term trading favored.
The light sweet crude oil market has fallen pretty significantly during the trading session here on Wednesday, as random panic has come back into various assets as per usual. Stability is not something the markets recognize right now, and that’s especially true in this market. It tends to be very choppy and questions anything along the lines of bullish pressure.
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Sanctions on Russia Never Truly Work
That makes a bit of sense here, mainly due to the fact that despite the Russian sanctions that have been levied on the market recently, the reality is that the Russians find a way to put oil into the market. I mean, at this point, Russian sanctions have been a fact of life for pretty much a decade, at least that I can think of. The Russians will find somebody willing to buy oil who will then slap a different label on it and send it somewhere else. It’ll find its way into Europe and everywhere else.
So I have been suspicious about any rally at this point in time because the demand for crude oil continues to slip overall, as a lot of economies around the world are slowing down. Ultimately, this is a market that I think could go looking to the $56 level, which begins with significant support down to the $55 level. If we were to turn around and rally quite nicely, then the $62 level is an area that I think we need to get above, and then we can truly take off to the upside. I think we’ve got a lot of noise here. I think we’ve got a lot of volatility here, and I remain more of a short-term trader here looking to fade oil on signs of exhaustion.
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