The West Texas Intermediate Crude Oil Market has turn things around after initially rocketing to the upside on Thursday as it looks like we are a little bit overextended. At this point time though, the market is most clearly bullish so you cannot be a seller under any circumstances. Traders out there are looking at the reopening trade and of course OPEC has reiterated its expectation of more demand going into the end of the year. With this being the case, then the market is likely to continue to see buyers on dips. With the jobs number coming out on Friday that also could come into the picture as well.
Brent Markets also gave up the initial gains during the trading session, but quite frankly it does not look like a market that you should be shorting. A little bit of a pullback will probably be thought of as potential value, offering the opportunity to pick up oil “on the cheap”, with the $70 level underneath likely to offer a bit of support, as it is not only a large, round, psychologically significant number, but it is also where the market had recently broken out of.
With that, “market memory” could come into play and based upon the ascending triangle that we just broke out of, it is very likely that we could go looking towards the $80 level over the course of the summer. In the short term, I look at any dip as an opportunity to get long yet again.