Crude Oil Analysis – Crude Oil Continues to See Pressures on Headlines

WTI Crude Oil

The light sweet crude oil market has found itself testing the $78.50 level yet again during the early hours on Thursday which has served as a bit of a ceiling. If you look at the spike last summer, the last time the Israelis and the Iranians were trading missiles, we found the $78.50 level as a hard ceiling. That shows that there is still a lot of market memory in this area so it’ll be interesting to see how this plays out. But it is worth noting that the Thursday candlestick does look a lot like an exhaustion candle.

WTI Crude Oil daily candlestick chart showing price testing the $78.50 resistance zone. Source: TradingView.

WTI Faces Resistance at $78.50

If we were to break down below the $75 level, it opens up the possibility of a drop to the $70 level. On the other hand, if the market were to break above the $78.50 level it opens up the next level, which would of course be the $80 level.

Brent

The Brent market looks very much the same as the $85 level is offering a significant barrier which is above the spike that we saw in June of this last year. It does suggest that Brent is suffering quite a bit more pressure after this military strike or war has started and therefore it does make quite a bit of sense that this should lead the way as Brent is more of a global asset as opposed to light sweet crude which is more U.S. centered. If we can break above the $85 level here, it could open up a move for Brent to go to $90.

Brent daily candlestick chart showing price pressing against the $85 resistance area. Source: TradingView.

Brent Still Needs a Break Above $85

I think you’ll have to pay attention to headlines more than anything else. This is a market that’s trading solely on emotion. If we do fall from here, perhaps breaking down below the $82 level we could drop to the $78 level and still be in consolidation so keep that in mind as well. As far as oil goes, I don’t have any interest in shorting it, at least not yet, but I am a bit leery of chasing it directly into resistance in either grade.