Crude Oil Price Analysis – Crude Oil Continues to See Support on Tuesday

WTI Crude Oil Technical Analysis

The light sweet crude oil market is hanging around the $70 level. The $70 level is an area that’s important as it is the top of the gap that kicked off the oil trading after the war was launched.

At this point in time, we are hanging around this area to figure out whether or not there is enough support. And I think there is. There could be a little bit of downside here, but not a lot. We have a scenario where we have sold off quite drastically and we’re pricing in peace.

Now the question is, assuming that we get that, what’s the summer range? Cuz there’s almost always a summer range. It is not going to be 50 cents like we’ve seen recently in the last couple of days. I suspect the top of the range is somewhere near the 200-day EMA. While it’s not a sure trade, the reality is we’re oversold, a little bit of a bounce makes a lot of sense, and that’s how I’m approaching this.

Brent Market Floor and Potential Upside Risks

Brent markets look very much the same. They have filled the gap, though, and I think $70 underneath will end up being a bit of a floor for this market. Again, I think we need to find some type of summer trade. Where that top is, for now I’m thinking $80, but it could be closer to the 200-day EMA.

Ultimately, this is a market that could get surprised, and if it gets surprised, it’s going to drive prices higher, not lower, would be my suspicion, considering we’re basically at what many would consider normal pricing. So, if things get worse in the Middle East all of a sudden, you’ll see oil take off. So, I think the risk is actually to the upside at this point, although unless it’s a game-changing type of announcement, it’s probably somewhat limited.

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