WTI Crude Oil provides day traders and large players with ample price action. A jump upwards on Monday which provided a large gap higher in WTI Crude Oil has created a sustained realm that is allowing for speculation and a test of short and near-term perceptions. Sentiment is being tested in quick hitting doses with sudden reversals and capable price differentials which allow WTI Crude Oil traders the ability to react to momentum shifts which are happening. Experienced speculators in the commodity have an opportunity to examine their technical and fundamental viewpoints and try them out in the market.
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How Middle East Escalation Keeps WTI Crude Oil Under Constant Pressure
The WTI Crude Oil market has been punctured once again by rising concerns regarding the Middle Eastern conflict which has escalated since last week. Price action seen early on Monday per a gap higher based on nervous sentiment among large players in the commodity have not vanished. A complex whirlwind of rhetoric is being heard from the U.S White House and Iran which has been loud and seen military actions take place in the Hormuz Strait and elsewhere in the region.
However, the loud and sometimes angry stances taken by the U.S and Iran also contain news about calls for a renewal of negotiations regarding the ceasefire, which had previously calmed the WTI Crude Oil market during the month of June into the first week of July. Speculators in the energy sector certainly will have to deal with a slew of developments which can be taken in a positive or negative manner depending on trading goals and their interpretation of the Iranian war concerns.
What WTI’s $78–$80 Range and Supply Signals Reveal About Market Nerves
Yesterday’s future prices in WTI Crude Oil did go above the $80.000 realm, but were not able to sustain the highs. The gap on Monday which took WTI Crude Oil quickly to the $74.000 vicinity on its opening and saw greater buying develop throughout the day as the $78.000 mark was eventually was hit created a new near-term realm. Thus, the highs seen on Tuesday and a slight reversal lower for the moment seem to have created support and resistance ratios that are testing the 78.000 to 80.000 USD levels.
Now speculators must deal with technical perceptions, but also the glowing realization that the Iranian war is not going to be resolved in the immediate future. The rhetoric from the U.S White House has also intriguingly focused on their stated belief that Crude Oil supply is abundant and have pointed to new agreements with Iraq supposedly being worked on to allow for its energy infrastructure to get U.S corporate funding. Meaning that traders might be worried about short-term military conflict, but that mid and long-term solutions regarding Crude Oil production and supply may salve nervous concerns.
Why Trading WTI Crude Oil in This Environment Demands Extra Caution
The nervousness in the WTI Crude Oil market is not about to disappear suddenly. While a de-escalation of tensions in the Middle East could certainly develop quickly (we have seen President Trump make startling rapid changes to his expressed opinions and sentiment plenty of times before), traders cannot count on calm. The highs generated in Tuesday’s trading in some respects are a warning sign and reminder for speculators in WTI Crude Oil that prices can climb higher if troubles grow.
However, the reversal lower after yesterday’s value challenged the $80.620 vicinity also show that experienced large players who do control the momentum in the commodity still seem to understand that even though there is anxious pressure which exists in the Crude Oil market, there is not pandemonium. The WTI Crude Oil market actually is waiting for its next boost of impetus, until then traders will speculate under worrying shadows, but ones that could also disappear.
WTI Crude Oil Price Chart
How Sudden Middle East Shocks Could Break WTI’s Current Range
WTI Crude Oil has been in a heightened state of anxiousness since the beginning of March. Traders have become accustomed to the not only potential changes of direction via rhetoric from the U.S White House and Iran which have stirred sentiment and caused rapid changes of price, but also actual military conflict. In the past handful of days there has been a definite military escalation, the price of WTI Crude Oil actually remains below the $80.000 in a rather demonstrative manner. There are no guarantees that quiet is suddenly going to emerge in the Middle East and peace will prevail, nor is there a promise of additional firepower being used which would make large players in WTI Crude Oil more nervous regarding logistics and supply.
What WTI’s Current Trading Realm Shows About Fear vs. Complacency
The current trading price of WTI Crude Oil is certainly higher than it was last week, but it is well below values seen in April and May when fear was a consistent part of the speculative landscape. Until there is another change to the continuously bumpy sentiment path that WTI Crude Oil face in the near-term, traders should prepare for a test of the current range and wager upon it, but be ready for all possibilities regarding sudden spikes (up and down) in price velocity caused by surprises from the U.S White House and Iran.
WTI Crude Oil Short Term Outlook:
Current Resistance: $79.900
Current Support: $79.000
High Target: $80.600
Low Target: $78.330
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