Crude Oil Forecast November 25, 2015, Technical Analysis

Light Sweet Crude

The light sweet crude market broke higher during the course of the day on Tuesday, testing the $43.50 level. This is an area that begins to see a bit of resistance, extending all the way up to the $45 level in our opinion. Because of this, we are not surprise at all to see that this market pullback, offering a potential selling opportunity. After all, the US dollar continues to strengthen over the longer term, and that will drive down the value of oil typically. Also, you have to keep in mind that the economic situation doesn’t necessarily call for higher oil prices, as the demand isn’t necessarily strong. We do get Crude Oil Inventories coming out today, and that of course can cause quite a bit of volatility in this market as well. Nonetheless, it’s obvious that selling is the only thing that can be done.

Brent

Brent markets tried to rally as well, but struggled at the $46.50 level and turned back around. With this, the market looks like it is ready to go lower, and because of this we will be looking for short-term selling opportunities as the market should grind its self lower. The $43.50 level below is the bottom at this point in time, but at this point in time it looks like we could break down below there and continue down to the $40 level as the large round number aspect of that figure will of course attract traders.

Rallies at this point in time are also selling opportunities in our opinion as the downtrend is most certainly strong, and there is a massive amount of resistance near the $47.50 level. The US dollar continues to strengthen overall, and with this it’s only a matter time before the currency value works against the value of a commodity that should see a bit of soft demand overall. In fact, we don’t necessarily have a scenario in which we are willing to start buying Brent at the moment as the momentum continues to be far too strong to fight.