Crude Oil Price Forecast – Crude Oil Plunges on Word of Talks

WTI Crude Oil Technical Analysis

The light sweet crude oil market has fallen rather significantly during the trading session on Monday, as it has been reported that the Americans and the Iranians have been speaking. With that being said, the market is likely to continue to see a lot of noise, and quite frankly, it would not be a huge surprise to see the market turn right back around on a couple of errant words from somebody else.

So with that being said, the market continues to be very noisy. I think it’s very dangerous and probably almost impossible to trade. There are still plenty of reasons to believe that crude oil will rally. It does look like it’s trying to bounce from the 61.8% Fibonacci retracement level early in the session.

But you also have to keep in mind that the Iranians have suggested that there were no talks going on while the Turks are now starting to say that perhaps there have been some messages passed back and forth between Washington and Tehran. So, in other words, this literally is going to come on the next rumor.

It is almost impossible to trade because you don’t know when that’s going to be. You don’t know what it’s going to be, but if I had to put money in the market—and the beauty of trading is you don’t—one would assume there’s probably a bid somewhere near $85.

Brent Technical Analysis

The Brent markets have completely cratered, and in fact, at one point in time, have dropped below $100. If that does in fact continue, we could see Brent unwinding to $92 pretty quickly. The Brent market is starting to bounce back a bit but is still down 10% as we head into New York trading.

This is a horrific-looking candlestick. It probably has some follow-through for the time being, but you’re also going to have to be very concerned about the next headline and whether or not it is more hostile or if there’s a missile launch at the wrong spot, that kind of thing. This is a very dangerous market and while I remain bullish, I think for the time being I’m not jumping in to catch a falling knife. Quite frankly, it’s untradable.