By FXEmpire.com
The Light Sweet Crude markets continued to grind lower on Wednesday as the market simply struggles to find any truly strong move for the bulls. The value of the Dollar is fairly high lately, and this seems to be deterrent for the value of oil as the commodity is behaving more as a risk asset than anything else at the moment.
The markets continue to suffer as the demand picture remains weak, and the economic picture is getting weaker and weaker. While the Federal Reserve Chairman Ben Bernanke suggested during the news conference today that the Fed was ready to do more easing if the economy needed it, the very fact that the Fed expects unemployment to be high for the foreseeable future does not bode well for industrial demand.
The action for the session was horrible, and the draft down was fairly strong. The $80 level is acting as support, and it appears at this point the level will be tested. The fact that the market is grinding lower over time suggests that there is a fair amount of pressure to the downside, and it will more than likely only be a matter of time before the level gives way. Certainly there is very little out there to suggest that the demand is going to pick up, and the Iranian situation has cooled somewhat over the last couple of weeks so it is possible we see lower prices in general.
The OPEC decision to continue drilling and producing at the same levels certainly won’t help the price either. However, Saudi Arabia is OPEC, and they are comfortable – so that’s all that matters. In fact, there is a real argument to be made that the Saudis are keeping prices low to punish the Iranians – who need prices as high as possible at the moment.
We are aggressively selling this market below the $80 level, if we can close down there. Otherwise, we are sellers on rallies at the first sign of weakness. As for buying, the $90 level will have to be overcome in order for us to do it.
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Originally posted here
