WTI/CL Technical Analysis
The light sweet crude oil market initially broke above the $60 level to show signs of strength. But again, we continue to see hesitation just above there that extends to the $62 level.
All things being equal, I think short-term rallies get sold into, as Russian sanctions or U.S.-led sanctions on Russia will probably end up being pointless. There have been multiple times in the past, and I don’t think that lasts as far as a catalyst for crude oil to go higher. We clearly are in a downtrend, and I think that continues to be the case going forward.
Brent Technical Analysis
Brent markets also initially tried to rally a bit, only to show signs of weakness just below the $65 level. The $65 level is also backed up by the 50-day EMA. That being said, I think you’ve got a scenario where anytime we rally, sellers will come back into this market to take advantage of cheap trades because you won’t have to put a lot of risk on the table. Quite frankly, unless we break above the $67 level, I’m just not interested.
There is a gap that still needs to be filled down to about $62.50, and then possibly we could drop down to the $60 level. Keep in mind that Russia, OPEC, and the United States are all producing a ton of oil right now, and there are a lot of questions as to where the global economy is going. If the global economy is slowing down, likely, the price of oil will just fall off of a cliff, and I think that’s a little bit by design right now. With that being said, this is a market that I think continues to be a fade-the-rally type of scenario.
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