Crude Oil Forecast April 25, 2017, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market initially tried to rally during the day on Monday but found the $50 level to be far too resistive. We turned around and fell significantly, reaching towards the $49 level. Currently, I believe that hedge funds are starting to step away from the oil markets, and that every time we rally it is going to play out as a nice selling opportunity as oil markets are dealing with massive oversupply. OPEC production cuts will have little effect longer-term in my estimation, so I believe that we are finally starting to see fundamentals work back into the markets again. I believe the market is going to go looking for the $47 level underneath, but we could get a rally from time to time to pick up more value for the sellers.

Crude Oil Video 25.4.17

Brent

Brent markets also tried to rally but found the $52.50 level to be far too resistive. We broke below the $52 level rather easily, and that suggests that we will go looking for the $50 level next. By doing so, I believe that this market will continue to offer selling opportunities on bounces. I think that the $50 level will be rather supportive, so it may take a while to break down through there. Once we do though, that should bring in a fresh round of selling in a market that suddenly looks very bearish. As hedge funds step away from the oil markets, we should continue to see selling going forward.

I have no interest in buying this market, at least not until we break above the $53.50 level, which of course is the bottom of the previous consolidation area. That should be resistance now, so if we can clear that it would show significant strength in a market. Ultimately, this market looks as if we are going to reach towards the $50 level underneath, and then perhaps even lower than that. I think that the oil market is going to continue to be very dangerous, but given enough time we should continue to see bearish pressure.