Crude Oil forecast for the week of December 5, 2016, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market broke higher during the week, clearing not only the shooting star from the previous week, but smashing through the uptrend line. We are now reaching towards the highs of the last couple of months, and of course are seen this in reaction to the OPEC production cut that was announced. Ultimately, it is the $60 level above that looks to be the target. If we can break above the top of the candle for the week, I feel that the buyers will start to take over again. Pullbacks could be value, but quite frankly I’m going to ignore them at this point because it would be within the previous consolidation area. I need to see more upward momentum to jump on the bandwagon when it comes to the WTI Crude Oil market.

Brent

The Brent market had an even more powerful move to the upside during the course of the week, making a fresh, new high. Because of this, the Brent market will more than likely leave the WTI market higher. A break above the top of the range should send this market looking for the $60 level, and then possibly even the $65 level. This has been a major turnaround, but quite frankly one of the things that I’m concerned about is that we still have a massive oversupply when it comes to oil even with the cut. Also, there’s a good chance that sooner or later one of the member states will step out of line and the sneak more oil into the market as they have been known to do time and time again in the past. You have to keep in mind that the Americans and Canadians will also go full tilt with higher prices, so the question then will be whether or not we can sustain any rally for a huge move higher. I suggest we can’t, but the next couple of candles probably will be bullish in crude oil markets as rain now the market seems to be focusing on the production cut more than anything else.