Crude Oil Forecast February 9, 2016, Technical Analysis

Light Sweet Crude

The light sweet crude market fell during the day on Monday, testing the $30 level. There is a significant amount of support just below there though, so we recognize that it might take a couple of attempts to get down below there. We do think it eventually done though, and could go as low as $28 given enough time. Rallies at this point in time will be treated with suspicion, and we will sell at the first signs of weakness. The US dollar is starting to soften a little bit, so that could give us a little bit of a reprieve, but at the end of the day it seems very unlikely that this trend is going to change anytime soon. After all, there’s really not much in the way of demand out there, and that will continue to be a huge problem.

Brent

Brent markets fell during the course of the day on Monday as well, struggling at the $34 level and turning back around to form a pretty negative looking candle. The shooting star suggests that we are going lower, and the $32 level is the first target that we have. We believe that the market will go even lower than that though, and a move below the $32 level should send this market to the $30 level, and then eventually the $28 level. Brent is probably struggling with demand even more than the light sweet crude market, so having said that it’s very likely that this market could fall rather rapidly.

There is no way to buy this market right now, just as we can say for the light sweet crude market, which of course is very bearish as well. Ultimately, this market should continue to go much lower but it’s only a matter of time before we get the occasional bounce. Those bounces will be looked at as opportunities to continue to short a market that is most certainly in a very long and very bearish downtrend over the last several months, and should continue to be.