I think we will stay within this $20 range for the entirety of the month, but with a slight upward tilt.
The West Texas Intermediate Crude Oil market has been very choppy over the last couple of months, and it is very likely that we will continue to see a lot of indecision overall. The month of June probably won’t be any better, and I believe we are looking at a situation where although a bit confused, it’s probably worth noting that we have been slowly drifting higher.
Most analysts believe that the market is likely to go higher given enough time. The $100 level underneath will be a major “floor in the market”, so as long as we can stay above there, I think it’s more likely than not going to be a market in which there will be plenty of interest. That being said, I don’t necessarily think that we will break out, but if we did go below there, it would be extraordinarily negative and could change the entire attitude of the market.
The $110 level seems to be a bit of a “fair value level” for the market, and with that, I believe we are probably going to see it act as a bit of a magnet for pariahs, just as we have for the majority of May. If we can break higher, then the $115 level is a resistance barrier that I think a lot of people would be paying attention to, which we have pulled back from a couple of times in the past. After that, then we have the $120 level which has been significant resistance. The crude oil markets have been noisy, to say the least, so I would not be surprised to see all three of these levels tested at one point or another during the month. However, it is worth noting that we have been drifting ever so slightly higher in general.
Keep in mind that there are concerns about demand out there, but at the same time the supply situation is pretty miserable. Because of this, the markets will probably be extraordinarily volatile due to inventory numbers coming out of various announcements, and of course, the inflationary numbers that could have people thinking less demand is possible. In other words, this remains very choppy and volatile, and I think we will stay within this $20 range for the entirety of the month, but with a slight upward tilt.