Crude oil markets have rallied a bit during the early part of the Thursday session as we continue to see buyers coming in and picking up energy based on the latest headlines coming out of the Middle East.
That being said, though, we have given back quite a bit of those gains, and this just shows the nature of this market and how it may or may not behave.
After all, the fluid situation in the Middle East and of course supply is going to continue to make this a difficult market, but given enough time, I would anticipate that we have a situation where a lot of back-and-forth short-term trading is probably how this is going to play out.
Market Range and Geopolitical Influence
Because of this, I am a bit cautious, but I also recognize that we could get a bit of a nice range bound trade between the $85 level on the bottom and the $100 level above as your barriers. If we kind of hang out in the status quo, that might be the way we trade.
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All things being equal, I like this as a market that eventually finds a higher floor than it once had, but I don't think we know where that floor is yet. Obviously, the latest headlines coming from either Tehran or Washington D.C. could have a major influence on what happens to the oil price, but I think we've got a situation where we may have seen the peak in oil unless of course the hostilities kick up again and in full force.
The occasional chippy headlines or noisy type of news item involving a minor action don’t seem to be enough to move this market anymore. Ultimately, I think we go lower, but we will probably stay in a range until we get some type of resolution.
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