Crude Oil Forecast January 20, 2017, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market initially tried to rally on Thursday but fell a little bit flat. We essentially didn’t do much, and the inventory announcement of the United States showed that we are continuing to build more inventory than originally expected. While it did not cause a major selloff, this is just another reason to think that perhaps oil markets will continue to struggle in general. The $51. 00 level begins a noisy area all the way down to the $50 level, so I think that a fall will be gradual. However, once we get below the $50 level, I feel that this market will continue much lower, and at that point in time the sellers will start to take control. Pay attention to the US dollar, if it starts to gain strength it will only accelerate that move. I believe that currently we have selling opportunities on rallies as your side of exhaustion.

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Brent

The Brent markets initially rallied on Thursday as well but also like the West Texas Intermediate market, they found themselves wanting by the end of the day. It looks as if the market is going to continue to grind lower, and eventually I expect support to give way. Rallies as show signs of exhaustion could be selling opportunities going forward, and I think that petroleum itself is in trouble because we simply have too much. The inventory numbers out of the United States were more bearish than expected, and of course that gives us pause to think that the rally may be running out of steam. A breakdown below the $52.50 level census market much lower. Rallies at this point in time I am going to avoid and simply look at as possible selling opportunities after size of exhaustion. I feel that it is only a matter of time before oil falls under its own weight again. With this being the case, I am going to be patient, and believe that the oversupply issue is starting to weigh upon the minds of traders around the world.