Crude Oil forecast for the week of October 10, 2016, Technical Analysis

WTI Crude Oil

The WTI Crude Oil market rose during the course of the week, breaking above the $50 handle. This of course is a very bullish sign, but there is significant resistance just above at the $52 level, and with that being the case I would need to see this market break above there before I start buying from a longer-term perspective. If we pullback, I think that there’s plenty of support near the $48 level below, and of course the $46 level below that as well. Ultimately, this is a market that does look like it’s trying to break out, but at this point in time we still have quite a bit to chew through before we can actually do so. Once we do, I think that we will probably reach towards the $60 level next.

 

Brent

Brent markets rallied during the course of this past week, and as a result the $52 level looks very resistive. If we can break above there, I feel that the market will probably reach towards the $60 level, and then eventually the $68 level above that. At this point in time, it looks as if we could be messing around with building an inverse head and shoulders that has a neckline we are testing at this point in time. However, we could pullback but I think this point of support near the $40 level, and then the $45 level below there.

I have no interest in selling, at least not right now although I do think that longer-term structural issues will come back into play. After all, the proposed OPEC cut back is for only 750,000 barrels a day, when the market is overproducing by 2 million barrels a day. On top of that, it doesn’t even take effect until November, so really at this point in time this is the market perhaps overreacting a bit. Nonetheless, you certainly cannot fight the market, so at this point it looks like buying only is going to be the way to go.

 

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