For a limited futures trading session, crude oil is posting significant volumes. Thus far, more than 375,000 contracts have changed hands on January WTI crude alone. The action has been decisively bullish, with prices rallying almost $2.00 to a test of the $54.50 area.

Without a doubt, politics is driving this market higher. OPEC and Russian production cuts announced at the G20 have investors evaluating long-term supply chain issues.

In addition, Tuesday brought several U.S. Senators calling for official action to be taken against Saudi Arabia for the killing of journalist Jamal Khashoggi. The results of a CIA investigation point to Saudi Crown Prince Mohammed bin Salman being directly involved. U.S. sanctions against Saudi Arabia are becoming a possibility, prompting energy traders to price the potential fallout into global oil markets.

January WTI Crude Oil Futures

If you are trading WTI, remember that the release of the EIA Crude Oil Stocks report has been delayed until Thursday (10:30 AM EST). Only a slight weekly draw of  0.942M barrels is expected. However, traders are choosing to be long this market due to the charged political environment.

Here are the levels to watch for the remainder of the session:

• Resistance(1): 62% Retracement Current Wave, $54.82
• Resistance(2): Bollinger MP, $56.22

Bottom Line: The bids are hitting January WTI futures in mass. Until elected, I will have sell orders queued up from $54.79. With an initial stop at $55.06 and a sub-1:1 risk vs reward management plan, this trade returns 25 ticks on a rejection of the $55.00 area.