WTI/CL Technical Analysis
The light sweet crude gapped lower to kick off the trading session on Monday, but we have since bounced around a bit as we are trying to sort out what to do next. All things being equal, this is a market that I think continues to see a lot of troubles as markets are trying to price in the idea of lack of demand or probably the better way to put it is massive supply.
The Russians, the Americans and the OPEC are all flooding the market with supply. And in this environment, it’s really difficult for oil to take off. So, I think we’re trying to find a range, but quite frankly, anytime this market rallies, we have to be thinking that it could very well sell off again.
Brent Technical Analysis
Brent markets are hanging around near the $66 level. And when I look at this, the $67 level above is a significant area of importance. All things being equal, the 50 day EMA sits right around $68 and is dropping. And then I think a little bit of a bounce here makes a certain amount of sense, but any type of exhaustion I think is probably a selling opportunity.
Ultimately, I think this and the light sweet crude oil market both are markets that are going to struggle to find a lot of buying pressure in the short term because quite frankly, the oversupply is an issue that probably won’t go anywhere. And we are starting to talk about a slipping global economy. I think eventually we will rally, but in the meantime, I just don’t see any reason why oil would take off.
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