Crude Oil has fallen by around $1 after the Trump Administration said that it would consider waiving tariffs on oil from some countries. Oil, both WTI and Brent had been pushing higher yesterday after API inventories showed a larger draw than anticipated at -6.796M barrels.
Resistance at $75 seems like it will be tough to crack if these waivers come into place. In the short-term, a draw in official inventories could well see oil fall into bear market territory.
I feel that if we still have a fair bit of downside to go to change our bias to bearish. I’m still bullish as a general rule here. As the trend is strong and nothing is confirmed yet. Although it will be hard to see price push through the $75 barrier in 2018.
Buy the Pullbacks
On a technical level, I feel that we would need to fall below $66 for me to change my bias to bearish at the moment. So if anything today’s pullback might just be a good time to be buying.
We have support above $72, so if we fall away to that level I think that would be a good long entry. Remember, commodity markets trend hard. While stocks mean revert.
If we get a strong trend, we want to be riding it for all it’s worth and buying pullbacks.
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