Crude Oil Price Outlook – Crude Continues to Try to Form Bottom

WTI/CL Technical Analysis

The light sweet crude oil market has shown itself to be somewhat bullish during the early hours on Tuesday, as we continue to see a bit of an attempt at forming a double bottom. All things being equal, this is a market that is oversold and I do think that we are going to make an attempt to get to the $60 level. The $60 level, of course, is a large, round, psychologically significant figure. And with that, I think there would be a certain amount of reaction there.

If we can break above the $60 level, then I think it opens up the possibility of a bigger move, perhaps to the 50 day EMA. Otherwise, I think we are stuck between $55 and $60 trying to consolidate and build up pressure to the upside.

Brent Technical Analysis

The Brent market is currently hanging around the $60 level. And as you can see, the $60 level, of course, being a large, round, psychologically significant figure, will attract a lot of attention. And with that being said, I think we are in the process of trying to form some type of bottom here. Keep in mind that there is a lot of supply out there waiting to get taken out. So, I think it is going to take some type of significant momentum, some type of significant announcement, something to that effect, to truly get the Brent market to rally.

But I also recognize that we are so oversold and from a technical analysis standpoint, it looks like we are trying to find the bottom. It’s going to be a very difficult move higher, but I do think that’s where we end before it’s all said and done. Short-term pullbacks I think continue to see plenty of support, and if we break down below the recent lows, that could be disastrous. So, we’re getting to the point where things are just getting way too overdone. So, with that, cautiously optimistic, but I also recognize position sizing will be crucial.

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