Crude Oil Price Outlook – Crude Oil Continues to Consolidate

WTI/CL Technical Analysis

The light sweet crude oil market has gone back and forth during Friday’s early trading session, essentially going nowhere. That makes sense given that the gap to the upside is being tested. If we break down from here, prices could drop toward the $58.50 level. Remember that the gap was driven by talk of new sanctions on Russian oil. However, we’ve heard that story multiple times, and Russian oil continues to reach the market.

Traders appear to be acknowledging that reality. At this point, $62 looks to be a bit of a ceiling, along with the 50-day EMA. This is an area that I think should continue to be watched closely, as it is the most obvious level in this asset.

Brent Technical Analysis

Brent markets look very similar. If they break below Thursday’s candlestick, the gap could be filled in time. Short-term rallies will face resistance near the 50-day EMA around $65.42, followed by $67 above that. Ultimately, this market seems poised to drift lower gradually rather than experience a sharp decline. There’s ongoing concern about oversupply from Russia, OPEC, and the United States, while global demand may be softening amid a weaker economic outlook.

For now, it’s a market where fading rallies showing signs of exhaustion appear to be the preferred strategy. With this in mind, I am not willing to chase this market, and I look at it as a “fade the rally” situation that we find ourselves in for the time being. We will need some kind of external pressure to make a bigger move.

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