Crude Oil Forecast December 15, 2016, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market initially tried to rally during the day on Wednesday but fell enough to basically fill the gap from the beginning of the week. That makes today very interesting, because if we continue to go lower that tells me that the market is not overly impressed by the OPEC and non-OPEC countries cutting production. Ultimately, there are structural issues that neither one of these entities can take care of. The Americans and the Canadians of course are not going to agree to any of this and as well prices rise, they will produce more. So having said this, if we breakdown below the $51 level, I feel it’s only a matter of time before we go much lower. Ultimately though, if we form a supportive candle I think we will probably try to reach the $54 level again. I am waiting for the close of business today to make my next move.

Brent

Brent markets find themselves very much incongruence with the WTI Crude Oil market. It appears that the $54 level is going to be supported, and most certainly the $53 level will be. If we can break down below the $53 level, I will not hesitate to start selling as the bread market should continue to go much lower. Alternately, some that a supportive candle in this general vicinity has me buying crude oil, and the bread market should continue to go higher. I think it will target the $57 level next, and then eventually the $60 handle. However, keep in mind that it will probably be fairly choppy as the move has been so strong as of late. I will admit though, I am not overly impressed at this point, so I have a sneaking suspicion that perhaps the market doesn’t look at the production cuts as hard as the initial reaction might suggest. One particular odd signal is the fact that the Canadian dollar is losing value. It basically means that the oil and the Forex markets are at odds currently, which typically means that somebody is completely wrong.

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