The saga from the Middle East intensifies. Not only is WTI Crude Oil being influenced from the Iranian sphere regarding the Hormuz Strait, but another actor has joined as a main attraction within the supply and demand for Crude Oil – Saudi Arabia. What was once a mere question about navigation of the Hormuz Strait has become a more dangerous entity, one that retail speculators of WTI Crude Oil can watch via news shows and business channels while they make their trading decisions.
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The price of WTI Crude Oil is performing like a soft commodity, one in which rumors are being heard and decisions have to be made regarding perceptions. Even if a developing news bulletin proves to be true, the impact on what is being discussed must be considered. Retail traders making decisions on their own perceptions and the noise coming from their televisions or radios need to also contemplate the idea that large players have already reacted to the reports being made public.
In other words, large companies with massive cash stakes in the price of WTI Crude Oil may have already traded moments before via their own sourced intelligence networks before the ‘developments’ are sounded for a worldwide audience. Prices in WTI Crude Oil are moving quickly and this will continue near-term. A comfortable sleep is not going to be allowed for most traders in the coming days.
Saudi Supply Concerns Keep WTI Oil Near $105
WTI Crude Oil is trading within sight of the $105.000 mark as of this writing. Stubborn prices above $103.00 are being seen. Saudi Arabia remains a focal point for traders as its supply logistics are being questioned and remain within a haze of newsworthy rumors regarding their main pipelines. Traders who once thought the Iranian Hormuz Strait situation was the only real problem regarding the Middle East saga have now had to expand their concerns.
If Saudi Arabia continues to run into problems regarding an adequate amount of supply reaching its buyers in Europe and elsewhere, then this will cascade into more nervous sentiment. For the moment the $105.00 to $106.00 ratios have held as resistance. However, if more anxiousness is heard regarding potential escalating Saudi Arabia hardships regarding the expanding conflict with the Houthis and Iraqi militias, large players who believed price around current values could be contained, may find themselves considering higher values for WTI Crude Oil and remain buyers in order to insure supply.
Can WTI Oil Hold Below $107 if Middle East Risks Ease?
The sun could come out tomorrow. Optimism could be found. However, all of the promises about a positive outcome in the mid-term now seem to be evaporating. Yes, there still may be a good outcome from the Iranian situation, but the addition of Saudi Arabian concerns into the conflict are not going to allow anyone to get too comfortable. While traders can believe and await on positive outcomes and better news, large players are certainly showing they are disoriented and negative. If prices of WTI Crude Oil climb over $107.00 and start to challenge the $110.00 levels, this would be a clear sign folks fear more unease. Price velocity at these higher levels is a real issue for smaller traders – and they need to be careful.
WTI Crude Oil Price Chart
WTI Oil Reversals May Remain Fast and Difficult to Trade
President Trump has said publicly that Iran is still seeking a solution to the conflict. However, before traders react to this banter from the White House, they will likely consider all of the other positive soundbites from the U.S administrations and consider it expressed hope instead of reality. The price of WTI Crude Oil seems to have entered a stubbornly high domain, not one that is going to suddenly decrease rapidly. Traders need to be ready for reversals, but they may be too fast to take advantage of unless an order has already been placed in the marketplace.
Fed Signals and Middle East News Keep WTI Volatility Elevated
The coming hours and days in WTI Crude Oil will remain an important talking point for all global investors. The U.S Federal Reserve is conducting its FOMC policy meeting pronouncements later today, the price of Crude Oil will certainly be mentioned during this event. The higher WTI Crude Oil prices must be treated with respect, they can go higher. However, developing news remains important and sentiment is not calm, so day traders need to prepare for all scenarios.
WTI Crude Oil Short Term Outlook:
Current Resistance: 104.950
Current Support: 103.900
High Target: 107.20
Low Target: 102.800
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