Crude Oil Forecast October 11, 2016, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market initially fell during the course of the session on Monday, but turned back around after bouncing off of the $49 level and shot above the 5100 levels. Ultimately, this is a market that is reacting to words coming out of the mouth of Vladimir Putin, suggesting that perhaps the Russians could cut back on oil production to help with OPEC’s attempt to drive the price of crude oil higher. Because of this, it looks as if the bullish traders are starting to become a little bit more enthusiastic, and as a result we should continue to see buyers enter this market on short-term pullbacks. Ultimately though, there are a lot of concerns that we are reaching the point where we are starting to see more and more drillers come back online in the United States as prices rise. In other words, longer-term there are still going to be problems with oil oversupply. In the short-term though, the buyers will certainly have control.

 

Brent

The Brent market initially fell as well then shot much higher and above the $53 level. Ultimately, the market should continue to go higher in the short-term as we are starting to see quite a bit of bullish sentiment enter this commodity. Again though, I’m worried about the oversupply longer-term but at this point in time we certainly cannot sell this market, it looks far too well supported. You also will have to pay attention to the US dollar which looks relatively bland, and as long as that’s the case that could slow down any assent in price.

I would be very quick to take profits in this job environment and perhaps stick to short-term charts only. If we did break down below the $50 level, I think at that point in time we would probably drop to the $48 level after that and then eventually the $46 level below. Ultimately, the market is one that will continue to be volatile, and with that being the case, I think you’re going to have a significant amount of volatility that you’re going to have to get over.

 

Oil Fundamental Forecast