Crude Oil Price Outlook – Crude Oil Continues to Flounder

WTI/CL Technical Analysis

The light sweet crude has been very noisy during the trading session here on Wednesday as we try to determine where momentum is headed. All things being equal, this market looks at the 50-day EMA as resistance, along with the $62 level. Breaking down from here could open up a drop below $60, suggesting the possibility of the market continuing its overall downtrend. I think oil is trying to tell us something, and that could be a potential selloff driven by concerns that the global economy might be slowing down.

The massive jump we saw after U.S. sanctions on Russia seems to have subsided, and with that being the case, there’s really nothing positive for oil at the moment. Not only are those sanctions largely ineffective—since the Russians will get crude out onto the market anyway—it’s a story we’ve heard multiple times. I still view short-term rallies as selling opportunities.

Brent Technical Analysis

The Brent market looks very similar, hovering around the 50-day EMA and the $65 level. Signs of exhaustion after short-term rallies will likely be sold into, perhaps filling the gap underneath the $60 level, an area where many buyers may look for support. I don’t necessarily think we’ll break down below there, but I do recognize that this market remains volatile and is probably trying to set up a new range.

Right now, I favor the downside, but I don’t think it’s going to collapse. I expect we’ll settle into about a $5 range, likely with $65—or that general area—acting as a ceiling.

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