Created on October 23, 2024

• During my daily analysis of the West Texas Intermediate Crude Oil market, it’s obvious that we have seen a lot of buying pressure on Tuesday.
• At this point in time, the market is likely to continue to see a little bit of momentum based on the size of the candlestick, and it is probably worth noting as well, that most of the headlines and pundits around the world believe that this is based on the idea of renewed Chinese demand, or at least the optimism surrounding the possibility of it.

Furthermore, we also have geopolitical escalations out there that continue to be a major issue. Quite frankly, the Middle East isn’t calming down, and one would have to think that sooner or later it would have an influence on the oil market. I don’t necessarily think that the market is paying close attention to it right now, because quite frankly it’s been rather lackluster as of late. All things being equal, I think most of this comes down to the idea of demand, as traders are assuming that the conflict involving Israel and several factions in the Middle East probably won’t spread.

It was an extraordinarily bullish day on Tuesday, but we also have to pay attention to the fact that the 50 Day EMA sits right around the $72.70 level and is dropping. I would anticipate that the 50 Day EMA could offer a little bit of a ceiling in the market, as it is so widely followed. If we were to break above there, then I think it’s likely that we will continue to see oil go much higher, perhaps reaching the 200 Day EMA which is sitting just above the $76 level.

On the downside, there seems to be a significant amount of support at multiple levels, not the least of which would be the $66 level, which is the bottom of the range for the last 2 years. I think we are just simply bouncing from the lows, and that if you are a buyer of this market, you are essentially doing it for a short-term trade more than anything else. I would expect plenty of volatility in this general region.

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