Crude Oil Price Outlook – Crude Oil Continues to Build Its Base

WTI/CL Technical Analysis

The light sweet crude market has rallied a bit during the trading session on Thursday in the early hours, as we continue to build pressure in this market. That being said, I think you need to pay close attention to the $65 level, because the $65 level being broken to the upside is a major victory for the buyers. And that could send oil much higher going forward. I do think that happens.

This could end up being your summer driving season trade. And I think that opens up the possibility of a move to the 200 day EMA, which is close to the $68.70 level or so. Short-term pullbacks, I think continue to get bought into, with the $60 level forming support.

Brent Technical Analysis

The Brent market looks very much the same and at this point in time, we are threatening the 50 day EMA. If we can break above there, the $68 level gets targeted. A break above the $68 level kicks off an inverted head and shoulders pattern, just like we see in the light sweet crude oil market. And that opens up a move to the 200 day EMA going forward.

This is a situation where I do think you have a lot of accumulation here, potential base building for the rest of summer. And I do think we will eventually head back into the previous consolidation area. That being said, if we break down below the bottom of this recent head and shoulders pattern, that would be extraordinarily negative and could send the market tumbling. As things stand right now, though, I do think that there’s enough interest here and the volume is starting to pick up. It looks like it’s a lot like accumulation.

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