Crude Oil Price Outlook – Crude Continues to Search for the Floor

WTI Crude Oil Technical Analysis

The light sweet crude oil market has been very choppy in early Wednesday trading as we are doing everything we can to try and find some type of floor. The $58 level is a good candidate, but really at this point, the one thing that you cannot escape is the fact that every time this market rallies, it seems as if sellers are willing to jump in and start shorting. Keep an eye on the 50-day EMA and the downtrend line, which both are hanging around the $60 level, which in and of itself has been important also.

The oil market continues to suffer from a serious lack of demand and oversupply. And I don’t think that changes anytime soon. So, I still look at this as a short-term trading environment where you fade short-term rallies that show signs of exhaustion and take advantage of the downtrend. Although I’m not looking for anything drastic. I think this is literally intraday trading most of the time.

Brent Technical Analysis

Brent markets look very much the same, hanging around the $62 level, an area that has been supportive a couple of times. And if we were to break down below there, then it could open up a move down to $60. But I believe at this point, we’ve got a situation where if we do bounce again, you’re going to be fading the oil market in the Brent grade, close to the 50-day EMA or the downtrend line.

I think $60 is your floor. If we break down below there, that would be a pretty impressive sell-off. Again, though, this is a story of oversupply coming out of Russia, OPEC, and the United States, and a global economy that seems a bit sluggish, and therefore demand is dropping.

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