Crude Oil Price Analysis – Crude Oil Drops to Support on Friday

WTI Crude Oil Technical Analysis

The light sweet crude oil market gapped lower to kick off the trading session on Friday and then dropped down to the 50-day EMA. The 61.8% Fibonacci retracement level is an area that I think a lot of traders will be watching very closely.

The 50-day EMA sitting right there will attract technical traders as well and I think, all things being equal, this is a situation where a lot of traders are probably just waiting for the next headline coming out of the Middle East. The question, of course, is whether or not the ceasefire can continue and whether or not the flow of oil comes out.

If we were to break down below the $83 level, then I think that opens up quite a bit of selling pressure in this grade of oil, and probably in both.

Brent Technical Analysis

The Brent market, of course, has fallen as well, shying away from the $100 level again, with the 50-day EMA near the $91.62 level offering support.

A breakdown below the 50-day EMA could open up further selling as it has offered dynamic support a couple of times in the last two weeks already. It would just show a re-acceleration to the downside.

I do think eventually oil falls in both grades, but probably to a higher level than it had been sitting previously. Finally, we’re still going to have some damage done to oil production. Ultimately, I think we’re probably going to chop sideways. We’re still waiting to see how this thing plays out in the Middle East, although the fact that there’s a ceasefire obviously is a huge step in the right direction.