Crude Oil Price Outlook – Crude Oil Continues to See Overhead Pressures

WTI/CL Technical Analysis

The light sweet crude oil market has rallied a bit after initially gapping lower on Monday. At this point, it looks like we are trying to get back to the $65 level, which, of course, is an area that we’ve seen a lot of noise at previously. Above there we have the 50 day EMA, looking very interesting as it sits right at $66. It’s very possible that we may see that as a potential target. We’ll just have to wait and see. But ultimately, I think this is a market that is going to try to pick itself up. But if we break down below the lows of the Friday session, I think that’s a very bad sign.

Brent Technical Analysis

The Brent market looks very much the same in the sense that it is doing everything it can to at least attempt to recover, but we’ll just have to wait and see how that plays out. I think this is a scenario where traders continue to see a lot of concerns out there when it comes to oversupply with the Americans and the Russians, as well as OPEC, pumping as much fruit oil as they can into the market, it’s not a huge surprise to think that perhaps we are going to see oil struggle to retain any type of pricing power. That being said, we are in the midst of forming a little bit of a double bottom. So, it’s not a huge shock if we do end up seeing a bit of a bounce.

The question is, can we get above the 50 day EMA? The 50 day EMA currently sits right around the $68.65 level. And therefore, that’s what I’m thinking a bounce might give us at best. It’s also worth noting that we have sold off every time we’ve rallied to try to get back there over the last several days. So, I think that is something worth watching. And as a result, I am pretty hesitant really at this point to get overly bullish on crude oil, but I do think that we’re probably due for a bit of a bounce. I don’t have any interest in trying to get too cute here. I think this is a short-term market. That’s all it is. You cannot get overly excited one way or the other, and you have to assume that there is going to be continued choppy volatility.

For a look at all of today’s economic events, check out our economic calendar.