Crude Oil Price Outlook – Crude Oil Continues to Look Soft

WTI/CL Technical Analysis

The light sweet crude oil market has rallied initially during the trading session here on Friday but gave back those gains as it looks like we are threatening the $60 level. The $60 level of the course is a large, round, psychologically significant figure and an area that’s the bottom of an overall support region that starts at $62. If we give up the $60 level, I think that’s a very bad sign indeed, as oil just can’t find a bid. Russia, OPEC and the United States are all pumping oil out hand over fist. And on top of that, we have to worry about global demand. At this point, I think we need to see a daily close well above the $62 level to begin to think about buying again. And truthfully, this just looks like a miserable place to be.

Brent Technical Analysis

Brent markets look very much the same as they are sitting on top of the $64 level. They rallied and tried to break above the $65 level, but gave back those gains quickly. Ultimately, this is the same story. It’s just oversupply and a serious worry about demand around the world. This being the case, I think the momentum is most certainly with the sellers. And I think it’s very likely that oil is going to struggle into the winter.

Whether or not it falls apart might be a completely different situation. But really at this point in time, I think you have to look at each rally with a bit of suspicion in a market that just can’t seem to pick itself up off the floor. We had been rallying nicely, but now we broke above that range and broke below that range with more emphasis on below and definitely more momentum to the downside.

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