Crude Oil Price Outlook – Crude Continues to Languish on Thursday

WTI Crude Oil Technical Analysis

The light sweet crude oil market has fallen a bit during the early hours here on Thursday as we continue to see a lot of negative pressure. All things being equal, this is a market that I think, given enough time, will probably continue to see more of a fading of rallies at the first signs of exhaustion. That’s been the game for about two months now, especially after we got the initial surge higher based on Russian sanctions.

Quite frankly, Russia’s been sanctioned, probably, I don’t know, as long as I can remember, and it just has not had the intended effect, as Europeans are still buying Russian oil through back channels. With that and an oversupply coming out of not only Russia, but the United States and OPEC, it’s difficult for oil to really take off at the moment. I think at this point, you’re looking at the 50-day EMA, which is just crossed below the $60 level as a potential barrier on any short-term rallies that you can fade on the first signs of exhaustion.

Brent Technical Analysis

Brent markets look very much the same, although they have a 50-day EMA at the $63.84 level and are dropping. But the one thing that I would say about Brent is it might be a little bit more sensitive to OPEC itself. Furthermore, we also have to keep in mind that if the global economy does slow down, that might continue to put a dampening on the demand for crude oil. Looking at Brent, it could drop all the way to the $60 level and not change much. And it is worth stating that if the candlestick stays like this, and we still have plenty of time left on Thursday, then a breakdown might be imminent.

Whether or not we break through the major floors in the market, being the $60 level in Brent or the $55 level in Light Sweet Crude, is a completely different conversation, but one typically would lead the other. So if we see that happen in one of these markets, the other one is probably sure to follow.

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