Crude Oil Forecast December 5, 2016, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market initially fell on Friday, but found enough support at the $50 level to turn around and form a hammer. The hammer of course is a very bullish sign and the fact that we have broken above the top of the uptrend line in the essentially found it supportive, as well as the strong move on the weekly candle, I believe that this market is ready to break out to the upside again. I don’t know how long is going to last, but certainly over the next couple of weeks it looks as if the bullish pressure will continue. We do have concerns about oversupply, and of course the United States and Canada will add to that with higher prices. Selling isn’t a thought until we get below the $49 level which would represent a pretty significant breakdown from what I see.

Brent

Brent markets of course did very much the same thing, as we found support at the $52.50 region. This is a market that has exploded to the upside and should continue to go higher. In fact, it is a bit more bullish than the WTI market, and could go a little bit higher. Ultimately, I feel that the market will have a lot of the same headwinds that the WTI market could have, namely oversupply and the possibility of a stronger US dollar. Currently, the dollar is soft been a little bit, so that could help, but given enough time I think that the longer-term issues will return. In the short-term though, you have to be bullish as there is simply no reason to think that were in a turnaround right away. If we can break below the $50 level, at that point I would be comfortable selling again, so until then I guess I have to be “buy only” as although I don’t agree with the longer-term outlook of the market, at this point in time there is no way to fight this type of bullish pressure as the move has been so drastic.

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