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Published on 6 Feb 2017
The
WTI Crude Oil market initially tried to rally on Monday but turned
around and showed quite a bit of bearish pressure. Towards the end of
the day, we started to reach towards the $52.50 level, an area where I
think we will see buyers come back into play. However, this is a market
that should continue to favor volatility in general, because there are a
lot of moving pieces at the same time. After all, the OPEC production
cuts of course were bearish for the markets, suggesting that perhaps
there would be less supply. However, at the same time we have seen a
build in inventories when it comes to America, which is a very bearish
sign. The OPEC production cuts have no effect on Canadian, Mexican, or
American drilling. Quite frankly, OPEC is powerless over the longer term
and it will only be a matter of time before the sellers get a bit more
aggressive. In the meantime, I believe a lot of back and forth trading
is what we’re going to see.
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