Brent markets fell last week, reaching down below the $53 level that is the signal we are going to reach the $50 level. That’s why, I believe it’s only a matter of time before we sell off below there as well, but it could cause a bit of a bounce. Any way I am waiting for good moment to open short positions, not long, because the supply issue continues to be a major issue, and with that it’s likely that we will continue to see sellers coming back into this market. I do believe the market has all chances to reach the $40 level, but that obviously is a longer-term move.
The markets should continue to go lower, as people begin to accept the fact that even major players like Exxon are starting to talk about oversupply been an issue for the long term.
WTI Crude Oil
The WTI Crude Oil fell as well, breaking the $50 level. Finally we went out of the range, and I believe market will continue to go much lower, perharps reaching the $45 handle. How to enter the market? I expect short-term rallies to be selling opportunities, and I believe that the $45 level will be targeted initially or even lower. The oversupply has finally taken over the attitude of the market. Anytime this market rallies, I think it’s only a matter of time before we sell off. Even though the OPEC production cuts have been front and center, we have not seen a massive reduction in supply. Quite frankly, it has gone the other way and OPEC has lost its ability to control the market.