Crude Oil Price Forecast – Crude oil markets try to stabilize

Crude oil markets went back and forth during trading on Tuesday, trying to stabilize a bit after what has been a very rough couple of weeks. This makes a lot of sense, because quite frankly at this point we are oversold.
Christopher Lewis
Crude Oil daily chart, June 05, 2019

WTI Crude Oil

The WTI Crude Oil market has gone back and forth during trading on Tuesday which of course makes quite a bit of sense as we are oversold. I would anticipate that there will probably be some value hunters here, but at this point I am much more comfortable fading rallies that show signs of exhaustion. If we can reach the $55 level I believe that there will be plenty of sellers in that area. Otherwise, we will probably reach down towards the $50 level underneath which is massive in its structural and of course psychological importance.

Oil Forecast Video 05.06.19

Brent

Brent markets have also gone back and forth during the trading session on Tuesday in a bid to find a bit of stability. The $60 level of course offers a lot of interest and structural importance, so it’s not a huge surprise to see this market sit here. If we bounce from here, and I do think that we will, I anticipate that the $65 level above should be resistance. Signs of exhaustion near that level should be nice selling opportunities.

Even though I believe that the market is ready to bounce, I’m not willing to buy it. I think that the market is inexorably broken, as there is no signs of real strength here. Don’t get me wrong, I do believe that this is not necessarily terminal, but clearly the uptrend has been broken recently, and therefore there’s no need to fight the overall downtrend as we worry about global trade, the US/China trade spat, and of course global growth.

Please let us know what you think in the comments below

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