Crude Oil (January)
Crude oil finds itself down again today as it is the 18th session in a row without a higher high then the previous session.
Nothing has been able to spark buying, yesterday’s option expiration, one in which there was massive open interest on puts did not worry those who were exercised into short futures to buy to cover. However, Friday is the January contract expiration and shorts will need to exit beginning today. We do expect continued volatility and both shorts and longs must manage directional risk. Traders need to watch the pivot level at 54.55-54.66 and a close below here will signal lower price action. However, today we do have EIA inventories and expectations come in at a drawdown of 2.86 million barrels, API did show a build yesterday. Yesterday’s high comes in at 57.15 and only a move out above here will help buck the immediate term down trend.
Resistance – 56.25*, 57.15**, 58.00-58.32***, 58.73*, 59.25**, 60.43*, 61.12*, 61.68*, 62.25-62.32**
Pivot - 54.55-54.66
Support – 53.60-53.80**, 50.00***