- Yes, WTI Crude Oil went into the weekend higher than it began last week. However, because of the Israel attack on Hamas in Qatar, and a political assassination in the U.S - allegedly done by a lone gunman, WTI Crude Oil actually finished the week rather calmly.
- Day traders may ask what the events had to do with the price of WTI Crude Oil, but simply put nervous traders can cause volatility – and fast trading was certainly seen on Tuesday and Wednesday of last week. Rather calm inflation data helped too.
- WTI Crude Oil started out last week within sight of the 61.500 level and by late Wednesday was near 63.770 in the futures markets. However, after large traders took a deep breath, WTI Crude Oil then started to trade lower and by early Friday the market was challenging the 61.430 vicinity.
- Yet, after this low was attained another run higher developed and a high of nearly 63.700 was flirted with until again – strong selling started to be seen as the weekend came into view.
False Narratives and Volatility in WTI Crude Oil
While it is easy to correlate a reaction in the price of WTI Crude Oil to Israel’s military action early last week into the energy sector, the death of Charlie Kirk may not seem logical. However, the assassination of Kirk may have caused some momentary reactions, however it can certainly be argued that WTI Crude Oil traders quickly became tranquil again.
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In essence even though WTI Crude Oil did experience some rather stark volatility, the commodity remained within a known price realm. The 61.400 to 64.000 ratios held back challenges and WTI Crude Oil speculators had room to wager on their technical perceptions. Yes, let’s not forget that inflation reports on Wednesday and Thursday also has an effect on the WTI Crude Oil market. A lot of large players will say it was the most important bit of news – certainly economically it was noteworthy.
Federal Reserve on Wednesday and Oil Trading
The Fed’s FOMC monetary policy decision will come this Wednesday. The U.S central bank is expected to cut interest rates by 25 basis points. Some believe a cut of 50 basis points is justified – and these people may be correct. However expecting the Fed to cut by 50 basis points is likely too optimistic.
- WTI Crude Oil will likely react to the policy statement by the Fed made on Wednesday in a rather big way this coming Thursday.
- On Wednesday most of the trading will be done before the Fed’s announcement and be a sign of where large players may be positioning.
- However, the Fed’s rate cut this coming Wednesday has largely been factored into the markets.
- It is what the Fed says about October outlook that could stir WTI Crude Oil.
- But having said that, nothing changes the fact that production and supply remain solid, meaning the known price range of WTI Crude Oil will likely remain the speculative force for day traders.
WTI Crude Oil Weekly Outlook:
Speculative price range for WTI Crude Oil is 59.800 to 64.200
What to do? Conservative day traders may want to try and simply test their technical perceptions and try to catch a trend when they believe a low or a high has been challenged and will spark reversals. News flow this week will be loud about the Federal Reserve, but many large players have already factored their positions via an interest rate cut.
This may open the door to some lower price momentum if and when WTI Crude Oil sparks a little higher and comes within sight of technical highs. Looking for lower price action – below 62.000 USD may feel speculative and it is – but it may prove to be correct for folks who think we are about to see additional downside pressure develop based on Fed outlooks being proven right.
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