Crude Oil Forecast January 24, 2017, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market fell a bit during the day on Monday, as we continue to see of volatility and choppiness in this market. I believe that we are currently in a massive consolidation area, and that the market has a lot on its mind. The $55 level above is significant resistance, while the $50 level below is a significant support. Because of this, I think we will continue to go back and forth between those areas, at least until we can make a serious decision on where to go next longer term. I believe that the oversupply of crude oil will continue to cause a lot of uncertainty in this market, just as a question of demand will. If we can break out of this area, I believe we then go to the next $5 level. In other words, if we breakdown below $50, we then reach towards the $45 level. Alternately, if we reach above the $55 level we will then go to the $60 level.

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Brent

Brent markets fell during the day on Monday but did find buyers underneath the $55 level to cause volatility. I still believe that we are chomping around overall, but I believe that the Brent market may be looking a little bit more soft than and the WTI market. If we can break down below the $53 level, the market should then go down to the $50 level after that. If we do rally, expect a lot of resistance near the $57.50 level. If we can get above there, then we can go to the $60 handle but I believe that it is going to be difficult to do that. Short-term, I believe that the market will continue to find the $55 level magnetic, and therefore we will rise and fall to reach that level repeatedly. Pay attention to the US dollar, it will have a massive influence on the value of Brent, as it does most other commodities. Demand is also a question, as the inventory numbers have been rather bearish as of late.