Crude Oil Forecast: WTI, Brent Test Breakouts on Supply Fears

WTI Technical Analysis

The light sweet crude oil market gapped higher to kick off the trading session on Thursday, pulled back a bit to fill that gap, and then turned right back around to the upside. This makes sense considering that we continue to see hostilities between the Americans and the Iranians, and of course now oil infrastructure is being attacked occasionally.

With all of that, it makes sense that traders might be trying to price in a bit of a disruption. It’s the same story we’ve been dealing with since the beginning of the war: missiles start flying, oil starts to rally. A little bit of calm can bring the price back down, but when I look at this chart, I see an ascending triangle that’s trying to break out.

Even from a technical analysis standpoint, it looks fairly bullish. I’ve got no interest in shorting crude oil, and I suspect that as long as this war is going on, anytime we get some type of pullback, there’s probably going to be buyers willing to get involved.

Brent Technical Analysis

The Brent markets are now well above the $100 level. We are filling the gap from the end of May, and now the question is: can we continue to go higher? This is an ascending triangle also. It’s probably a cleaner version of it, and this does suggest much higher pricing if it is to be believed.

Quite frankly, it’s not a real stretch to imagine that there might be more hostilities in the Persian Gulf area, and because of this, oil is going to be very sensitive. Ultimately, this is a very bizarre game of chicken being played by the Iranians and the Americans via the media and the oil markets. This is what we get when that kind of strategy starts playing out. We get confusion, fear, and higher prices.

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