I’ve been keeping a close eye on crude oil ($CL_F) these last few weeks, I had expected $108/barrel to hold as resistance but with the threat of a U.S. air strike in Syria we got a print of $112/barrel – even though Syria’s oil production only represents 0.2% of the global supply. With the pick up in the oil market we’ve seen a somewhat similar rise in the price of spot unleaded gasoline ($RB_F).
The below chart shows the gasoline market going back the last nine months, as you can see it can be quite volatile. The recent price action has taken the spot price to the falling trend line resistance from the February and July highs. We also have the 61.8% retracement between the February high and June low.
Over the last couple of days we have seen an intraday break of the retracement resistance but bulls would need to get a close with the following day confirming the break to get gasoline prices rising higher. On the downside we have the rising trend line that could come into play around $2.95-$3.00 if we do see some weakness over the next couple of days.
As Obama continues to flesh out whether to pull the trigger on Syria we could see large moves as the market tries to digest the relevance and impact out of the violence and unrest in the Middle East.
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