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Light Sweet Crude
Wednesday’s action was fairly bearish as prices continue to fall for the CL April contract. Volumes are fair, but not overly heavy at these levels as traders grapple with the idea of the $105/barrel price being resistance.
As the charts look now, it appears that for any new bullish move, we will have to see $107.50 broken. Any short-term bearish move should find the CL looking for $105 as support. The falling to support scenario seems to be the more likely of the two scenarios at the moment as traders should little desire to test the highs at this point.
Brent
Brent is a slightly different story that the CL contract, as Libya is on everyone’s mind. Libya produces the Brent version of petroleum, and as such it is weighing more heavily on the Brent contract. Wednesday’s action was very bullish as we were up $2.63 a barrel as Libyan forces have begun to drive back the rebels in that country.
The levels that we are watching currently are $120 and $110. A break above $120 would signal more bullish action to come, and a break below $110 would be bearish for the short-term. A break below the $110 level should have us finding support at the $105 level.
