Crude Oil Forecast January 17, 2017, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market fell on Monday, but you should keep in mind that the Martin Luther King Junior holiday in the United States would’ve taken quite a bit of volume out of the market. Because of this, you can’t read too much into the candle but when I do see is that the market is trying to roll over in general. After all, there are a lot of concerns when it comes to whether output cuts will be followed, and because of this I think that a little bit of doubt is starting to creep into the market. That doesn’t mean that selling is easy, but quite frankly trend changes never are. I believe that exhaustive candle’s after short-term rallies are selling opportunities but you should realize that there is going to be quite a bit of volatility. Because of this, you may be better off trading short-term charts.

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Brent

Brent markets fell slightly as well, but again we would have a lack of volume. The $55 level is offering a little bit of support, so if we can break down below there I think that the market will drop down to the $53.50 level, which I see as supportive as well. Any rally currently should deal with a lot of resistance near the $57 level, so because of this I expect that we will continue to see sellers coming back into the market repeatedly. Ultimately, I think that the strengthening US dollar will continue to weigh upon the Brent market just as it will the WTI Crude Oil market.

There is a serious lack of demand, and of course oversupply. As the Iraqis are producing more oil now, it’s likely that the oversupply issue will continue. The Iranians aren’t held to the production cuts either, and you would have to think that the Russians will eventually abandon ship as they aren’t tied to OPEC in general. Because of this, I have serious doubts about the long-term viability of an uptrend. However, do not expect this to be an easy short.