Crude Oil Forecast December 9, 2016, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market went back and forth on Thursday as the $50 level continues to attract a lot of attention in the market. This is not only because there is a large, round, psychologically significant number of this area, but as you can see on the chart, there’s also a very previously important uptrend line. Because of this, I think that the market will have to make quite a bit of that decision here fairly soon. If we can break above the top of the range for Thursday, we should continue to go higher. Alternately, if we break down below the bottom of the uptrend line should send the sellers back into the market and perhaps drive down the value of the market to the $47 level, possibly even the $45 level after that as it was an area of significant support.

Brent

Brent markets went back and forth during the day on Thursday as well, as we ended up forming a bit of a slightly negative candle. A break down below the bottom of the candle should send this market looking towards the uptrend line that I have on the chart, where we should see quite a bit of support. However, if we break down below there the $50 level will be targeted, and then eventually the $45 level underneath there. Ultimately, this is a market that could find quite a bit of selling pressure due to the US dollar strengthening around the world in the Forex markets, plus the fact that the demand for oil has been very low.

Ultimately, this is a market that also has to deal with a massively oversupplied market has even though the OPEC nations have decided to cut back production, the reality is that the United States and Canada will continue to drill, as well as Mexico and several other nations around the world. We do not have a shortage of oil on the horizon anytime soon, and that of course should continue to drive lower going forward as the glut continues.