Crude Oil Forecast August 5, 2015, Technical Analysis

Light Sweet Crude

The light sweet crude market bounced during the course of the session on Tuesday, slamming into the $46 level. However, this is without a doubt a very soft market, and we believe that at any point in time, it can turn back around. Do not forget that the crude Oil Inventories announcement comes out today, and that of course will have drastic influence on this market going forward. With this, we believe that it’s only a matter of time for the sellers come back into this marketplace. We see the $47 level as been resistive, and we recognize that the bounce probably have more to do with $45 being a large round number of than anything else. Ultimately, this is a very soft market, and we think that should continue going forward. In fact, we have no interest in buying anything in this market until we get above the $50 handle.

Brent

Brent markets bounce as well, but found enough resistance above the $50 level to turn things back around and form a shooting star. That shooting star of course signifies that we should see some continuation, and as a result we are sellers on a break to a fresh, new low. We believe that the $52 level above will be the beginning of significant resistance, and we do not feel that there is any way to buy this contract into get well above the $55 handle. Even then, there is a significant amount of noise above there, so really it’s closer to the $60 handle that we would feel “safe” in buying Brent market contract. In the meantime, we are simply looking for short-term rallies in order to start selling yet again, as we believe the market should then head down to the $45 level given enough time. Ultimately, this market will probably suffer a bit more than the WTI grade, simply because the WTI market is more North American-based, and therefore should have a bit more demand as far as market forces are concerned as the US economy is the strongest of the major ones at the moment.