Crude Oil Price Outlook – Crude Oil Continues to Chop Back and Forth

WTI/CL Technical Analysis

The light sweet crude oil market shot straight up in the air during the trading session on Wednesday in the overnight electronic trading hours but has also seen quite a bit of give back as the market broke above the 50 day EMA. The $65 level above is an area that I think will continue to be difficult. And if we were to break above there, then the market could go looking at the 200 day EMA. But there is a lot of downward pressure in general.

After all, this is a market that has been sold off quite viciously over the last several months, basically since the beginning of the year, as there are concerns about tariffs crippling global trade. There’s also the problem with OPEC producing way too much at the moment and showing no signs of stopping. So, with that, I think we’re stuck in this area between $60 and $65 in the light sweet crude contract.

Brent Technical Analysis

Brent markets initially rallied as well, but just like in the other contract, we gave up the gains once we got above the 50 day EMA. This is a market that I think continues to see a lot of noise, somewhere between the $60 level and possibly the $68 level, most certainly $70. So, with that, I think we’ve got a situation where markets are just trying to sort out where to go next.

I do think that if we can break this $68 level, then we’ll start to work our way higher, but we’ll have to see how it plays out. Short-term pullbacks do make sense, with the $60 level underneath being the floor, and I think offer buying opportunities anytime we drop. We have formed a double bottom and that is a good sign, but whether or not it holds, we still have to wait to see.

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