Crude Oil Price Outlook – Crude Oil Continues to See Base Building

CL/WTI Technical Analysis

The light sweet crude oil market initially rallied during the trading session on Friday but gave back gains to show signs of hesitation. By doing so, the market looks as if it is trying to figure out what to do as breaking above the $60 level should have brought in new buyers. We’ve seen pushbacks since then, and now it looks like we are going to continue to see a lot of noisy behavior.

The $60 level should, at least in theory, be somewhat supportive. But even if we break down below there, I see a lot of noise extending all the way down to $58 that could be somewhat important. I still believe that the crude oil market is in the process of trying to build a basing pattern. And that of course can be a bit of a messy situation. And that’s exactly how this is playing out.

Brent Technical Analysis

Brent markets look very much the same as we broke above the $64 level but then turned around to show signs of weakness again. At this point in time, we continue to see a lot of noise extending all the way down to the $60 level, which is a large, round, psychologically significant figure and an area that’s been important multiple times in the past. With that being said, I think you’ve got a situation where traders continue to look to the upside, but we need some type of good news to really get things moving.

This weekend, we have the Americans and the Chinese meeting, and that might be what we’re waiting for. Short-term pullbacks could be buying opportunities, but I think it’s very difficult to get overly aggressive in the oil market until the trade situation gets sorted out, and that’s probably going to take serious time. Nonetheless, it does look like crude oil is supported just below.

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