Crude Oil forecast for the week of May 1, 2017, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market initially fell during the week but found enough support at the uptrend line to turn things around and form a hammer. I believe if we can break above the $50 level, the market will probably go looking for the $54 level. I would point out that the most recent high was a bit lower, so we could see a breakdown as well. A break below the uptrend line on the chart, extensively the $48 level, the market starts to sell off significantly and perhaps reaches $45. I believe that this market will be very volatile, as there are several moving pieces when it comes to the petroleum markets. OPEC production cuts have not worked so far, and of course there’s been quite a bit of bearish news as far as oversupply is concerned. Going forward, it’s good to be interesting to see how this plays out but this week should be very important.

WTI Video 01.5.17

Brent

Brent markets initially fell during the week, testing the $50 level underneath. However, we bounced enough to form a hammer and that of course is a bullish sign. I think if we break the top of the weekly candle, the market will go looking for the $55 level. Alternately, if we break down below the $50 level that should send this market much lower, probably to the $45 level initially. Brent markets get to be especially sensitive to headlines, as OPEC production cuts are still in the minds of traders, and of course oversupply around the world continues to plague oil markets in general. With this being the case, I think this is a market that will have a very important week, and should find the next candle very important from a longer-term perspective. The hammer of course is bullish, but we are starting to see serious downward pressure. Expect volatility, and be very patient when placing a longer-term trade as we need to see our important level is breached to put money to work in a responsible manner.