Crude Oil Price Outlook – Crude Oil Continues to Look Soft

WTI Crude Oil Technical Analysis

The light sweet crude oil market has shown itself to be rather weak again during Friday trading, as we initially tried to rally and have sold off.

I continue to mention this downtrend line and the 50-day EMA as a bit of a barrier. I don’t expect light sweet crude oil to simply fall apart and break down below the $55 level, but I do expect it to continue to be attracted to that level.

If we do break down below that level, then obviously that changes things; it makes things much worse for oil. While it looks like we are going to at least attempt to do so, I don’t think we’re in imminent danger of it.

Over-supply and under-demand are a bad combination. Every time this market rallies slightly and shows signs of exhaustion, I’m willing to short.

Brent Technical Analysis

The Brent market looks very much the same, and we are now approaching the $60 level. This is an area that I’d be watching between there and roughly $58.50 for some type of support. But a bounce, I think, at the first signs of exhaustion—a wick on the candlestick if you will—is a selling opportunity.

Brent markets, of course, are going to be under the same dynamics as the light sweet crude oil market. As the United States, Guyana, and a few other countries are just flooding the market with oil, it’s very unlikely that either grade of oil is just simply going to take off.

Quite frankly, at this point in time, it would probably take some type of external shock to the system. Right now, I think the Bears are still very much in control, and therefore I’m choosing to side with them.

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