Crude Oil Forecast February 8, 2016, Technical Analysis

Light Sweet Crude

The light sweet crude market went back and forth during the course of the session on Friday, forming a fairly neutral candle. That being said though, it appears that the market still has plenty of downward pressure on it, so it’s almost impossible to imagine buying this market for any length of time whatsoever. Any rally at this point in time should attract sellers, and an exhaustive candle will more than likely give us an opportunity to take advantage of value in the greenback as the market should continue to follow the same fundamentals that we’ve seen play out for so long now. There is simply far too much in the way of supply for the demand to take it out, and because of that we feel that this market is one that you cannot buy.

 Brent

The Brent market went back and forth during the course of the day on Friday as well, testing the $34 level, but finding enough support. With that being the case, the market sees quite a bit of resistance above, especially near the $36 handle. Brent markets of course will suffer not only due to the fact that we have stronger US currency in the marketplace, but we also have a serious lack of demand. Brent markets tend to be more affected by Europe and other parts of the world, so at this point in time it’s very difficult to imagine that this market is going to pick up for any significant move.

The $40 level above should continue to be resistive, so that is what we are looking at as the “ceiling” in this market. If we can break above there, then we can start talking about a potential trend change. Until then, we think that the only thing that you can do with the Brent market is selling going forward as the downtrend is so ensconced in this market, and quite frankly there’s no reason to think that we are going to change in the short-term based upon what we see on the chart.