Brent markets rose as well, rallying to the $82 level, an area that previously had been resistant before pulling back. They look a bit healthier, but that makes sense, it’s a little bit closer to the action right now.
On Friday, I did say something about if there is military action, there’s a real chance that Brent outperformed light sweet crude, and so far, that’s been the case. The question now is, can we keep up this type of momentum, and the answer, of course, is it depends. It depends on what happens next as far as the conflict is concerned. If you know that ahead of time, then that’s how you trade this. Otherwise, you have to assume that sooner or later this market falls apart.
I actually would look to short the oil market, I just wouldn’t do it right now. I need to see that the oil supply is going to be fine. The reality is the light sweet crude market is based on North American oil, which is not disrupted, and Brent, of course, is overseas and therefore a little more susceptible. The supply of oil is still out there; it will just have to be routed from other sources.
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