- The light sweet crude oil market has rallied on Wednesday, breaking above the crucial 50-day EMA.
- This is mainly driven by the idea that the situation in the Middle East is not getting any better.
- The Americans and the Iranians continue to send messages back and forth, but quite frankly, nobody seems to want to blink, and that is an issue that I think continues to have people worried about the overall supply.
- That should drive prices higher and of course we are in a fairly busy time of year when it comes down to demand.
The market breaking above the 50-day EMA is a technically bullish sign and now I think we will probably try to get to the $100 level. That being said, we did just fill a gap that formed several days ago, and now we could see a little bit of resistance, but I think any pullback at this point in time ends up being a buying opportunity. The $90 level below I think is a bit of support right along with the $85 level as well.
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Geopolitical Pressures and Technical Ranges
And quite frankly, I think we're just in a situation where it's difficult for people to get overly bullish about crude oil as there's just so much noise around the conflict in the Middle East. It's probably only a matter of time before things get worse.
And it's also worth noting that we have been in a range for a while. The $85 level is at the bottom, and the $115 level is the top. We're just trying to get back to the top of the range that goes all the way back to March. I have no interest in shorting crude oil. Anytime it falls, I think that offers an opportunity for people to buy cheap barrels.
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