Crude Oil forecast for the week of May 23, 2016, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market rallied during the course of the week, breaking above the $40 level. With this being the case, the market looks as if it is trying to continue to go higher, and with that being the case we need to see some type of either break out to the upside or a pullback in order to start buying. If we can break above the $52 level, it looks as if the market will then head to the $60 handle. It really isn’t a scenario in which we are willing to sell this market until we get below the $43 level, which is something that probably isn’t going to happen this week. So in essence, we are simply waiting to buying this market when we get the appropriate signal to do so.

 

Brent

Brent markets went higher during the course of the week as well, but not quite as severely. The $50 level above should continue to be resistance, but eventually we need to break above the $52 level in order to go along with any real conviction over the longer term. Pullbacks will continue to be buying opportunities as well, as the $44 level below continues to be massively supportive. That’s essentially the “floor” in this market, as the buyers have certainly taken control.

We have to pay attention to the value the US dollar as well though, because it of course has a massive effect on the price of oil, as it is priced in dollars of course. The market has been very strong lately, and if the US dollar continues to fall over the longer term, that should only add fuel to the fire. Having said that though, the market has quite a bit of trouble above, so it is possible that we will struggle in this area, or perhaps even fall backwards. Ultimately, expect quite a bit of volatility and it’s likely that the WTI Crude Oil market will be easier to trade from the longer-term than the Brent market.