Crude Oil Forecast Today 10/04: Bounces After Tariff (Video)

(MENAFN- Daily Forex)

• The light sweet crude oil market has initially gotten hammered, but as you can see, we have seen the market turn right back around and scream to the upside.
• This makes a certain amount of sense considering that Donald Trump has removed tariffs for a bulk of the countries with the exception of China and the 10 % base tariffs that he was talking about throwing on everybody anyways.
• That being said, a 10 % tariff isn't as massive of a problem for the world.

There's quite a few countries out there that have been tariffing the United States 20, 30, 40 % for decades. So really it does more or less kind of just somewhat even the playing field. It's not aggressive. It's something that producers of various goods around the world can absorb.

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That being said, it's worth noting that we are above the $60 level, but we are giving back some of the gains. And I think the process here is going to be extraordinarily noisy. The $65 level above is a massive barrier. If we could break that, it would be a huge win for the bulls. But right now, I don't think we're anywhere near that. I think we're probably closer to a situation where we're trying to form some type of basing pattern that is higher than we hit overnight. But we also have to worry about China and their reaction to the now 125 % tariffs on their goods, because during the day Amazon, and I'm starting to hear a little bit of chatter from Walmart as well, are canceling orders from China. This is a big deal. This means things just got a little uglier. Chinese banks have been ordered not to buy US dollars. Good luck with that. There's no way to pay international debts without them. So, things are going to get very interesting very quick.

With that being said, there is a certain amount of concern about the overall global demand. If China slips into a recession and the US slips into a recession, everybody feels it. So, I think this is still a market that you would want to at least think about being bearish on, but you might want to get out of the way of trying to short it. A range between $60 and $65 does make a certain amount of sense, but you need stability before you start putting money to work.

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