Crude Oil Forecast December 12, 2016, Technical Analysis
WTI Crude Oil
The WTI Crude Oil market rallied on Friday as we continue to seek a bit of consolidating ahead of this weekend’s OPEC and non-OPEC countries meeting to decide whether or not to increase a production cut. If we get that out of the non-OPEC countries, that should put bullish pressure on this market and send it higher, breaking above the recent high of just a few candles ago and perhaps reaching to the $55 level. Alternately, if we can break down below the $50 level, I feel that point will probably try to make a move to $48, and then eventually the $45 level. Longer-term there are structural issues when it comes to crude oil pricing anyway, because the US and Canada of course are going to continue to add rigs to the fields as prices rise. However, and the short-term it’s all about this past weekend’s meeting.
The markets rallied on Friday as well but turned around to form a shooting star based upon the $54 level. It looks as if the $55 level is offering quite a bit of resistance and the $53 level is trying to offer support. We have recently broken out, but until this meeting is out of the way I don’t see how Brent could have ever truly continued to go higher. Obviously, the decision as to whether or not Russia and other countries like that will be cutting production will have a major effect on pricing and the short-term, and as a result I believe that if there is no deal the market will probably crash right back to the $50 level, and then ultimately down to $46 where there is much more support. On the other hand, if we break above the top of the shooting star from earlier in the week, the market is free go to the $60 level based upon oil production output being cut by non-OPEC members. Keep in mind that the US dollar continues to be strong, and that could be a bit of a headwind for any rally.