Crude Oil Price Outlook – Crude Bounces After US Military Action

WTI Crude Oil Technical Analysis

The Light Sweet Crude Oil market initially fell during trading on Monday but has since turned around, showing signs of resiliency. That being said, a lot of people out there are trying to bet on what happens after the military action in Venezuela by the United States. The reality I believe, based on the math, is not much. That being said, the next couple of days could be noisy, and there could be occasional spikes in one direction or the other.

Quite frankly, the world was awash in oil before this action, and let’s just say that suddenly Venezuelan oil, which isn’t producing as much as they once did, was available for the market. That only drives the price down. Supply shocks really won’t be a thing in this environment, and as a result, it is very likely that this rally will fade just like many others have. The downtrend line and the 50-day EMA are all basically suggesting that the ceiling is somewhere near $59 in the short term.

Brent Crude Oil Technical Analysis

Brent markets look very much the same, with a downtrend line sitting above what could end up being a hammer. The $63 region looks to be difficult to get above for Brent, and as things stand right now, it doesn’t really look like much has changed.

I do believe at this point in time that the floor is still in for both grades of oil, but that doesn’t mean that we are ready to take off to the upside either. Quite frankly, we just don’t have enough demand to take out the massive amount of supply that’s being produced. Fading the rally continues to be my mantra here.

For a look at all of today’s economic events, check out our economic calendar.