Crude Oil Price Outlook – Crude Oil Continues to Drift Lower

WTI Crude Oil Technical Analysis

The light sweet crude oil market initially did try to rally a bit during the trading session on Monday, but you can see we have seen the market fall apart and at this point the market is likely to continue to drop towards the $55 level, and short-term rallies I think will open up selling opportunities in this market.

This is a market that of course is starting to get a little overdone, but I think it’s obvious that the lack of demand and the massive oversupply continues to be a major issue for oil. And therefore, it’s not until we break above the $60 level that I’m actually really convinced that we could see a turnaround. I like the signs of exhaustion on short-term rallies to fade at signs of exhaustion.

Brent Technical Analysis

Brent markets look like they are heading towards the $60 level, which has been a large round psychologically significant floor in the market, and an area that I think a lot of people will be watching. If we break down below there, anything below $59 really gets interesting and we start to fall apart. Short-term rallies, I think, open up the possibility of selling on signs of exhaustion, but we’ll just have to wait and see how that plays out.

The downtrend line and the 50-day EMA both offer significant resistance, somewhere near the $63.50 level. And it’s not until we break above there that I even consider buying crude oil. With the massive supply coming down from Russia, OPEC, and the United States, I think it still struggles.

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