Crude Oil Forecast November 26, 2015, Technical Analysis

Light Sweet Crude

The light sweet crude market went back and forth on Wednesday, settling on a slightly negative candle. Ultimately though, the thing that we are paying attention to the most is the fact that it was such a volatile session. With Thanksgiving been today, do not expect much in the way of movement but at the end of the day the one thing that we can discern is that it appears this area will continue to be very volatile. Perhaps we are trying to find some type of direction at the moment, but over the next couple of sessions it’s probably going to be difficult to see that happen. The $45 level above will be a bit of a “ceiling” in this market, while the $40 level below will continue to be the “floor.” The meantime, selling rallies on short-term charts will probably be about the only thing you can do.

Brent

Brent will find itself in a very similar situation as the light sweet crude market, as we believe that selling short-term rallies will be the way to go. Ultimately though, the one thing you have to pay attention to is the fact that the candle for the session on Wednesday was fairly negative, and wiped out most of the gains from Tuesday. We currently believe that the “ceiling” in this market is somewhere near the $47.50 handle. The floor is somewhere close to the $43.50 level, and with that we believe that the market will simply bang around back and forth on short-term charts. We recognize that the longer-term trend is most certainly negative, and with that it’s only a matter time before sellers reenter this market when it rallies. After all, the US dollar continues to strengthen, and that of course is very negative for commodity markets in general.

Brent tends to be very sensitive to the economic situation in the European Union, and as a result we believe that will work against the value of this market as well. Ultimately, we have no interest whatsoever in buying this market and believe that we will continue to break down lower once volume picks up after the holiday.