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Relax! Oil will sell off soon: Pro

Will the crude rally derail the economic recovery? Many traders have asked themselves that question, as crude is trading $10 higher than it was just a month ago.

The answer, however, depends how long oil stays at these levels. If oil remains at these levels for the remainder of the year, then yes, it will have a negative impact. But with that being said, I don't expect us to remain this high for too much longer.

The fundamentals of this market, in my opinion, don't justify $107 oil. We are very near record supplies in Cushing, and the demand for crude, while higher than it was, is nowhere near the levels we saw just a few years ago.

And as new technology and new efficiencies are implemented, crude demand should not increase in any substantial way. We are only a few weeks from the end of driving season, which means that one of the main drivers of crude is about to be removed.

Justin Solomon | CNBC

For all these reasons, barring any unforeseen issues such as hurricanes or geopolitical problems, crude should be topping out at these levels.

So how am I looking at the crude chart now?

The $108.50 to $109.50 area has provided good resistance. Under that, look at $107.50. And if we get through $105, then $102 is right around the corner.


Anthony Grisanti is the founder and president of GRZ Energy. Follow him on Twitter: @AnthonyGriz.

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