• Traders of WTI Crude Oil saw volatile trading develop on Friday as the commodity spiked from an intraday low of nearly 76.050 and suddenly jumped upwards challenging the 78.200 ratio.

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• WTI Crude Oil began last week’s trading calmly and below the 73.000 USD level. 
• The sudden move higher in price occurred as traders reacted to news that an oil tanker had been attacked by Houthi extremists.

Reports started to emerge late on Friday afternoon New York time that a ship owned by Trafigura, a multinational company headquartered in Singapore, had been hit by a missile. The ship was carrying Russian oil. The news of the ‘successful’ attack certainly sent a shock wave through the WTI Crude Oil sector and prices reacted with a fast climb upwards. Traders ‘lucky’ enough to have long positions of the commodity beforehand likely profited from the Red Sea chaos.

Early December Highs Suddenly Challenged by WTI Crude Oil

When tomorrow’s trading of WTI Crude Oil begins, volatility should be expected during the opening minutes and this will likely continue an hour or so. However, traders who believe the price of WTI Crude Oil will continue to increase blindly should note that this is likely not going to happen. While the attack on the ship carrying Crude Oil will worry the market, larger players in the commodity will certainly have news that the fire on the vessel was contained. The question now for traders is if major shipping on the Red and Arabian seas can continue to ‘safely’ operate and how risks will be contained.

• The opening for WTI Crude Oil early on Monday should be watched closely.
• If WTI Crude Oil falls below 78.000 USD this might be a sign that Crude Oil speculators have been able to calm their nerves via potential statements coming from producers and shipping companies operating in the Middle East.
• If the price of WTI Crude Oil surges past 79.000 USD early on Monday, this would be a signal some large players are still nervous.

Day Traders and the Larger Forces of WTI Crude Oil Speculation

Day traders who choose to speculate on WTI Crude Oil early this week need to understand that risk sentiment is fragile. Large players within the Crude Oil sector have solid market intelligence regarding the status of shipping and likely have information which will allow them to react quicker than smaller speculators. Day traders need to monitor prices technically and gauge sentiment early on Monday. Importantly, day traders need to understand most of the larger players in WTI Crude Oil are experienced and may return to their trading desks more calm than they were on late Friday when news of the Red Sea attack first were heard.

WTI Crude Oil Weekly Outlook:

Speculative price range for WTI Crude Oil is 76.100 to 81.100 USD.  

The volatility seen late on Friday is noteworthy, but traders who believe WTI Crude Oil will return to calmer conditions should note that the 76.000 price in the commodity has been tested since Thursday – before the Red Sea attack. And in fact the price of the commodity had climbed from lows seen earlier in the week. The sudden jump in price on Friday fed into the uproar and nervousness surrounding WTI Crude Oil, but the commodity had already climbed in price during the first handful of days last week.

The ability of WTI Crude Oil to trade lower early this week if larger players are tranquil certainly exists. However, the question where current support levels could prove durable and what will happen if nervousness regarding the Red Sea shipping lingers is a key. The Middle East crisis is not going to be solved this week, which means risks are going to continue to be heard about – the question is how loud concerns will grow and what the reaction in WTI Crude Oil will be. It is possible the commodity may be about to demonstrate a higher price range.  Day traders need to be careful this week in the energy sector.

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