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• The crude oil markets exhibited a slight uptick in trading activity during Tuesday's session, signaling a phase of consolidation and potential accumulation.

West Texas Intermediate

WTI, the benchmark for US crude oil, witnessed a modest rally as liquidity returned to the market. Nevertheless, market participants anticipate continued volatility ahead. The crude oil market currently grapples with several complex factors simultaneously. Among these, the ongoing attacks in the Red Sea and concerns regarding falling demand coexist with OPEC's efforts to limit production. This confluence of events creates a period of significant uncertainty in the crude oil market.

Within the WTI market, the $75 level presents formidable resistance, closely aligned with the 50-day Exponential Moving Average. Conversely, strong support is evident at the $68 level, forming a range in which the market is expected to fluctuate. This is a problem for those of you trying to hang onto a longer-term position, but rangebound traders continue to thrive in the oil markets at the moment.

Brent

Brent crude oil faces a similar scenario, as it aims to challenge the $80.50 level following the breach of the 50-day EMA. A solid floor is established at $72, providing stability in the market. Presently, the market appears to be in an accumulation phase, lacking the additional momentum required for a substantial rally. It is crucial to note that Brent typically follows WTI trends closely. As such, investors should monitor potential price dips, which could offer attractive buying opportunities.

Selling crude oil at this juncture is not a favored approach for many investors. Both WTI and Brent crude oil are positioned at the lower end of a long-standing trading range, underscoring the historical significance of this price level as substantial support. This historical context discourages short-selling and suggests a preference for accumulating positions. I think that larger players are trying to sort out their longer-term positions at the moment in this area.

At the end of the day, the crude oil markets recently experienced a modest upturn, signaling a period of consolidation and potential accumulation. With a myriad of factors influencing the market, including geopolitical events and production limitations, volatility remains a constant presence. Both WTI and Brent crude oil face resistance levels but maintain robust support at lower price points. The current market climate favors a cautious approach, with an eye on future rallies and opportunities for value-based investments.

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