Created on November 08, 2024

• The West Texas Intermediate crude oil market has bounced around during the trading session on Thursday as we wait for the FOMC meeting but there are a lot of technical things going on at the same time.
• The market is currently hanging around the 50 day EMA which is a large indicator that a lot of people pay close attention to.
• The $72.50 level above is a significant resistance barrier.

If we can break above that, then I think it opens up the possibility of a move toward the 200-day EMA, which is attractive to a lot of traders. And that happens to be near the crucial $75 region. If we pull back from here, the $70 level could be a major support level as we’ve seen a couple of times here recently, but even if we break down below that, then you’re looking at $67.50 level as a potential floor as well.

In general, this is a market that I think continues to see a lot of choppiness and indecision, and there are a lot of things going on to cause that. After all, we have seen the $65 level underneath is a massive floor in the market over the last couple of years.

The USA is About to Make Its Prescence Known

Regardless, this is a situation where the United States will be a major influence on the oil market going forward now that Donald Trump has been elected. One of his biggest platforms is to continue to drill and make not only the United States, energy independent, but energy dominant. For example, there are places in United States territory such as the Anwar, which is a preserve in Alaska, but if they tap that, it has more oil than Saudi Arabia. There is a high probability that the Americans will start drilling in places like that again, and if they do, it will put a bit of a ceiling on the market. That being said, that is several months out, maybe even a couple of years, but that will be an overhang in the market. So, I think we go sideways, possibly as high as the 200 day EMA, but breaking above there, I think is going to take some type of event. We’ll have to wait and see.

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