The light sweet crude oil markets have filled the gap from the start of the war.
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The light sweet crude oil market initially fell on Thursday but turned around to show signs of life. All things being equal, this is a market that is going to pay close attention to the fact that Friday is a holiday in the United States, which has a major influence on liquidity.
Beyond that, we also have to keep in mind that we just filled a gap from when we got word that the United States had attacked Iran. So, because of that, we have made a complete round trip from that shock. This tells me that the market is trying to completely price out the war and basically has.
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Summer Range Discovery and Key Technical Barriers
But the fact that we bounced should not be a huge surprise because we had fallen pretty significantly, and if we recover from here and continue to the upside, then it opens up the possibility of a bounce towards the $75 level. Signs of exhaustion, I won't hesitate to short, but I think what we're really going to see here is a market that is trying to figure out where the summer range is. Right at this point, we might be at the very bottom of that range, closer to the $68 level.
Ultimately, this is a market that I think will remain very choppy and noisy as traders try to price in the idea of no war, but also the idea of a summer range where people are looking to get involved in what is a tight range because of the pickup in fuel. If we break out to the upside, the 200-day EMA, currently at the $78.64 level, I think is about as high as we go, at least in the near term. I think a bounce makes sense, whether or not it is something that we hang on to is a completely different story.
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