Crude Oil Price Analysis – Crude Oil Filling the War Gap

Crude Oil Technical Analysis

The light sweet crude oil market is testing the region just below the $70 level, and it’s interesting because we’re getting close to filling a gap that got kicked off due to the war. If that’s the case, then we’ve done a complete round trip; it’s like the whole situation with Iran never happened, at least as far as the crude oil markets are concerned. For what it’s worth, Brent has already done that.

So, I do think that we continue to see a little bit of downward pressure here, but the question then becomes how much further can we fall because we are now at levels pre-war, and we still have supply issues. I think supply issues will be the story for the next couple of months.

We’re probably going to avoid a complete disaster; that’s not what I’m saying, but what I am saying is that there will be some shortages here and there that will drive prices up. This time of year is typically range-bound anyway, so it would make a certain amount of sense that we find a range and maybe start from where we were heading towards in the first place.

The 200-day EMA is just above the $79 level. I would expect that to be a short-term ceiling. A little bit of sideways action makes sense after a move as we’ve had; that’s typical anyway. So, now that we’ve done basically a round trip here, we’ll try to find our range is my opinion.

Brent Technical Analysis

The Brent market, as I mentioned previously, has filled the gap. Now I think $70 is your support level. Getting too much further below there, I think, is unrealistic. A bounce from here does make a certain amount of sense. I’m not necessarily looking to buy it, but if I see some momentum, it might be a nice short-term trade.

And again, I think the 200-day EMA is probably your ceiling for the moment. We will find some type of summer range, that’s typically how crude oil behaves anyway. And of course, Brent is going to fall into that attitude as well, unless, of course, something kicks off in the Middle East again. I don’t think that’s going to happen. I think the world’s finally seeing that all sides are a little bit tired in that conflict at the moment, so we will probably try to find a new equilibrium.

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