Don’t be fooled by WTI's tight range because "something’s going to give."
The price of crude oil continued to rise Tuesday on news that U.S. manufacturing unexpectedly expanded in September for the first time since May as new orders and employment picked up. The Institute for Supply Management said on Monday its index of national factory activity rose to 51.5 from 49.6 in August.
(Read More: US Manufacturing Expands for First Time Since May.)
In turn, the market allowing oil to trade just through our $93.10 resistance to a high of $93.33 a barrel. This presented a great selling opportunity as the market consolidated down towards $92 a barrel.
It is lifting off of that level now this morning, currently at around $92.65 a barrel. The previous highs at $93.84 a barrel will be a barrier for the bulls, but I am eying the range from $94.28 - $94.69 as the line in the sand. A close above that level will be convincing enough for bears to short cover and the bulls to jump back in.
Looking forward, my expectations remain small before Thursday's announcement from the European Central Bank, but I will continue to look for selling opportunities between $93.10 and $93.84 until this market closes above my key resistance.
Here are some key levels to watch:
Resistance — $93.10**, $94.28 - $94.69**
Support — $91.07, $89.75, $88.95*, $87.10***
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—Reuters contributed to this report