Crude Oil Price Analysis – Crude Oil Plunges on Monday

Light Crude Oil Futures Technical Analysis

The light sweet crude oil market has plunged pretty significantly in the early hours on Monday, as there was no strike on the Iranian regime over the weekend, and therefore it makes a certain amount of sense that some of that risk premium has been taken out.

The 200-day EMA is broken through to the downside, and I think this is a situation where we are even below the $62 level. I think short-term rallies at this point in time continue to face a lot of headwinds. The market is likely to see the $66 level as the ceiling.

Brent Technical Analysis

The Brent markets look very much the same as we have broken below the 200-day EMA as well, and now it looks like we are going to go looking to the $65 level. All things being equal, this is a market that, given enough time, I think has to make a bigger decision.

As we see this right now, I believe this is a market that is trying to figure out whether or not $65 will, of course, be a large, round, psychologically significant figure that a lot of people will be looking at. The 50-day EMA sits just below there; we break down below there we could go right back down to $60. I still believe that the oversupply of crude oil will be a massive headwind, and therefore I remain bearish, although I don’t want to chase this after it has dropped 5% already.

Quite frankly, I do think we are trying to carve out a bit of a range in this sell-off. I think it is directly due to the fact that the Americans did not attack. Now, I don’t know how much lower we go. I think $62 to roughly $60 is an area that is almost like a magnet.