Crude Oil Forecast January 18, 2017, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market initially tried to rally during the day on Tuesday but found the area near $53.50 to be far too exhaustive. Because of this, we did a forming a shooting star and I feel that the market will continue to find sellers every time we tried to rally. This is particularly interesting considering that the British pound skyrocketed against the US dollar during the day, and this pull back happened on a day that basically was somewhat dollar negative. I believe we are trying to roll over, and will reach the $50 level over the next couple of sessions. A breakdown below the bottom of the shooting star has me selling. Alternately though, if we break above the top of the shooting star I believe that the market will and reach towards $55 again where will find even more resistance.

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Brent

Brent markets did the same thing during the day as they typically do, following the WTI market. The $57 level offered enough resistance to turn the rally around and form a very exhaustive looking candle. Because of this, I believe that the market will continue to go much lower, perhaps reaching down to the $54 level. Rallies will continue to be selling opportunities as far as I can see. I believe that the $57 level begins a massive amount of exhaustion, and as a result I have no interest whatsoever in buying.

A breakdown below the $53 level should send this market looking for the $50 level, and it seems to me that the market is trying to roll over in general. I believe that the oil markets will continue to be oversupplied and of course participants will be worried about whether or not the OPEC countries will actually pay attention to the output cuts that the agreed-upon. They have a long history of member states ignoring these quotas, so having said that I feel it’s only a matter of time before the sellers win this market again. I have no interest in buying oil anymore.