The light sweet crude oil market has fallen during trading on Friday, as it now looks like we are doing everything we can to fill the gap from the pre-war trading.
Light Sweet Crude Oil
The light sweet crude oil market has fallen during trading on Friday, as it now looks like we are doing everything we can to fill the gap from the pre-war trading, and I do think ultimately this is a market that, given enough time, does exactly that. This market could find itself dropping to the roughly $67 level pretty quickly. The $67 level is basically where we kicked off the gap higher for the war, and over the last couple of weeks, we've really seen traders starting to price in the idea of peace. Peace, of course, breaking out helps the idea of supply, but the supply of crude oil is still going to be a bit of a moving target because, of course, the damage to the supply chain continues to be something that will be felt here and there.
That being said, an actual full-scale interruption of supply, unless of course something external happens, is probably somewhat unlikely. Short-term rallies at this point in time probably get sold into, but I do think that a bigger bounce is coming.
Summer Trading Range and Technical Levels
Typically, this time of year, you'll see the crude oil market try to find some type of summer trading range, and that opens up the possibility of maybe this gap being a bottom and the top being somewhere near the 200-day EMA. That would not be a real stretch of the imagination. So, we'll see. I still think short-term charts are going to be your entries to the downside, but over the next couple of days, I think we'll probably start to see the bottom be put in.
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