Crude Oil Price Analysis – Oil Continues to Wait for Headlines

Crude Oil Technical Analysis

Crude oil, although closed in the futures market on Friday, will be the focus of trading on Monday. The light sweet crude oil market, of course, did not open the futures market for regular hours, although there was some electronic trading.

The reality, though, is that light sweet crude is stretched, and quite frankly, it’s almost impossible to do an analysis of this market, with the exception of pointing out a couple of obvious support levels. The $100 level for me is crucial and I do think it will be tested.

The question is going to be whether or not headlines coming out of the Middle East will be conducive for higher or lower pricing. Quite frankly, you’re just going to have to watch social media and news channels over the weekends and see if there’s any progress to opening up the Straits of Hormuz, or do things get uglier? If they get uglier, oil goes higher. If there’s some type of peace overture, oil goes lower.

Brent Technical Analysis

And again, Brent markets would be very much the same as the Thursday candle is the last real candle that we’ll have. So, a pullback here, I think, makes a certain amount of sense as well, right around the $100 level, I’d expect to see a lot of support.

But again, this is going to come down to headlines. You really don’t know what could be said on Saturday or Sunday. Perhaps the Iranians decide to attack another oil rig or an oil tanker, like they did the other day.

Or perhaps there’s more talk of some type of peace deal, maybe there’s talk of Iran and Oman, like we had in the previous session, working out some type of deal where tankers can get through the Strait of Hormuz. So, there’s a very fluid situation and this is when technical analysis can give you levels to pay attention to, but it doesn’t really tell you what you should expect to see.

$100 will be important; anything below that gets interesting to the downside as a recovery, but that probably comes with a peace dividend. In other words, you are at that point in time expecting the war to come to an end. Ultimately, I think we’re stuck in a range and that’s probably what we’ll find ourselves dealing with on Monday.