Crude oil volatility is declining as prices consolidate near the 50% retracement level. Upside and downside risks are largely balanced. Gold may approach $1300 on a break of resistance. Commodities - Energy Crude Oil Near 50% Retracement Level Crude Oil (WTI) $76.58 -$0.21 -0.27% Crude oil pulled back a little over 1% on Thursday, but prices are still holding above $75.50 support. Oil has been benefitting from stability in the financial markets. News out of Europe has so far failed to worsen, and thus traders are reevaluating whether risk assets, including oil, are oversold. Prices have rebounded about 50% of the losses incurred during the entire correction. So where does oil go from here? Inventories across the globe are still at very high levels. OPEC production is steady and its spare capacity is in excess of 5 million barrels per day. On the bullish side of the ledger, the deepwater drilling moratorium will have an adverse effect on production that comes out of the region over the next year and possibly beyond. The most likely outcome is an oil market in which prices continue to gyrate with broader financial markets, but with the potential for limited gains from current levels, as risks to the upside and downside are balanced. The next significant technical resistance level is $80.00 On the downside, $75.50 is the level to watch.

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