(MENAFN- Daily Forex)

• The Light Sweet Crude Oil market initially tried to rally during the trading session on Wednesday but then gave back the gains to start falling rather drastically. We have slammed into the $62 level, an area that has been support for quite a while, extending all the way down to the $60 level.
• This is a huge“zone of support” that continues to support the market, but we also have to ask questions about whether or not the demand for crude oil will start to pick up, or if the supply will just simply overwhelm it?

Rangebound?

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I think we are still rangebound, despite the fact that it has been a negative trading session. After all, there are plenty of things pushing market in both directions, not the least of which will be tensions in the Middle East, worries about Russian crude oil supplies, but at the same time having OPEC, the United States, and the Russians all trying to flood the market with supply. In other words, there are a lot of questions as to whether or not we are going to be overwhelmed by supply.

Furthermore, we have to worry about the global demand situation, because it looks like economies are starting to struggle. On the other hand, it's probably worth noting that the United States recently had an EIA number that was much stronger than anticipated, meaning that the Americans are still burning petroleum rather quickly. If that continues to be the case, then it makes a certain amount of sense that we would bounce from here and go looking toward the $65 level above. On the other hand, if we were to break down below the $60 level, then I think crude oil starts to fall apart, and we may drop toward the $57 level rather quickly. Expect a lot of choppy volatility in this sideways and noisy market.

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