WTI crude finding $105 a tough nut to crack
Oil has been falling as the Middle East fear factor wears off and supply concerns dwindle.
The news that the US maybe opening the door a crack to oil exports was overblown and less of a story when you delve into it. If anything it potentially means that US independent oil producers could start to ramp up refining themselves. If anything that would lead to even more oil being produced in the States which will dampen prices. An interesting article from Forbes explains the situation very well.
It’s been a slow slog but it’s finally looking like WTI is going to crack 105 after several attempts over the last couple of days.
WTI crude daily chart 02 07 2014
The first important area is 104.50 and the old late May highs, then the broken Feb resistance line at 104. Stronger support is at 102.20 and 100.72
I’ve been shorting WTI all the way up to the highs and my initial target is just ahead of the 102.20 area. If I see that this 105/104.50/104 level is becoming too strong I might just cut out early.
I’m also short Brent, again up to the highs and I’m looking to initially get out just ahead of 111, which was strong resistance on the way up, and the broken Feb 2012 resistance line which is at 110.75
Brent crude daily chart 02 07 2014
I’m a lot more confident in the fall in Brent so may push my profit target down further depending on how it’s looking. If it breaks then I’ll lock it in at the 111 level anyway.