The light sweet crude oil market continues to stagnate near what I think could be a bottom. However, there are still many questions to answer.
Light Sweet Crude Oil
The light sweet crude oil market has been somewhat stagnant during the trading session on Monday, which is not a huge surprise considering that we are still trying to sort out what to do next. We are sitting right in that gap that kicked off at the commencement of the war between the Americans and the Iranians.
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And now that we have done a complete round trip, we have to ask questions as to whether or not we try to find some type of range. I think that does make sense. This time of year, typically, you will. So, all things being equal, I think we're getting close to the bottom here. And I'm looking at short-term pullbacks as potential buying opportunities.
I have no interest whatsoever in shorting this market, and I do think that the upside is probably more likely to play out, but I think it's somewhat limited. Maybe somewhere near the $75 level we start to see trouble, perhaps even the 200-day EMA above there. It's really not until we break above there that I become extraordinarily bullish.
Middle East Supply Dynamics and Range Expectations
I think the market is just waiting for more information coming out of the Middle East in the form of whether or not supply is going to continue to strengthen, which it has, or whether or not there are going to be moments in the supply chain down the road that are very bumpy, which it probably will be.
Generally speaking, this time of year, we do go sideways. I think we're pretty much finding the bottom right here. So, I think there's more risk to the upside. I do not expect the market to melt down here, or anything like that, but anything's possible. If we were to break below the $66 level, that could be an ugly turn of events.
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