As organized 4th of July celebrations dissipate in the unbearable mid-summer heat, and Katy Perry’s “Firework” lyrics fade into the hot summer nights, “family trucksters” trekking across our great nation are certainly not celebrating gas prices at the pumps. Fireworks continue to light up the “trading skies” for the bulls as WTI for August delivery is trading near its 4 year high at $73.60 bbl, RBOB is up $0.0339 trading at $2.1424 gal, and HO is up $0.0233 at $2.1917 gal. Since the middle of June, and after OPEC’s decision to increase production to fill the oil production/export void that will be left by re-imposed sanctions against Iran, WTI has rallied nearly 17% or $10.69 bbl.
If WTI can settle above $74.86, look for market technicians to eye the next major resistance level of around $76.23 for a glimpse into how strong of a bull this energy sector is really dealing with. Downside, a settlement below $72.35 indicates a move towards the next major support level of $69.98 within several days. So the question still remains, will Saudi Arabia be able to produce enough oil to fill the void left by the Bolivarian Republic of Venezuela and Iran in the near future? Until then, we cannot exclaim with firework “oohhss and awwes” that we may see $100 crude oil quiet yet. One thing is for sure, volatility in the energy sector shall provide for an interesting rollercoaster ride.