Crude Oil Price Analysis – Crude Oil Continues to Face Pressures

WTI Sweet Crude Oil Technical Analysis

The light sweet crude oil market is just a touch negative during trading here on Tuesday as we are drifting lower, and I think eventually trying to get to the $70 level. If we break down below there, we could fill the gap to go to $67, which would be all the way back to the beginning of the war.

In other words, I think a lot of people are looking at this through the prism of a market that is pricing in normalcy. Whether or not that actually ends up being the case, then we’ll have to wait and see, but really, I don’t think that is the situation we’ll find ourselves in. I do think that there will be a bounce eventually because of the supply disruption; it will take some time to work itself back out.

But having said that, as things stand right now, clearly rallies are to be faded with signs of exhaustion as your entry.

Brent Sweet Crude Oil Technical Analysis

The Brent market looks very much the same. It is getting fairly close to filling a gap at the $73 level and then eventually 70. Short-term rallies will see resistance at the 200-day EMA sitting just under the psychologically important $85 level.

With that being said, I think we’ve got a scenario where short-term rallies that show signs of exhaustion will be sold into, but if we were to somehow break above the $85 level, that would obviously be very bullish.

Really, at this point in time, I think oil goes much lower eventually, possibly back down to $60 a barrel, but we’re months from that happening, mainly because even though the Strait of Hormuz is open, it will take some time to build the supply chain back up. So, I am bearish, but I recognize that we will get the occasional bounce.