CL/WTI Crude Oil Technical Analysis
The light sweet crude oil market has gapped lower and then started to plunge early during the trading session on Monday, but it has turned around to at least show signs of life. Now, while I wouldn’t go so far as to say it looks like we are going to have a big bounce. A bounce from the $60 level, an area that we tested earlier in the session, could make a certain amount of sense when you look at longer term charts. There are still a lot of fears when it comes to global trade and a slowdown in global trade could very well lead to less demand. And that’s essentially what you’re seeing here. Coupled with the idea that OPEC is adding another 400,000 barrels a day in supply to the market.
Brent Crude Oil Technical Analysis
Brent looks very much the same as we dropped below the $65 level, but now it looks like we are trying to bounce a bit. The market has been crushed over the last several days. And think ultimately at this point in time, we might get a little bit of a relief rally. Whether or not that changes anything remains to be seen. Quite frankly, I’d need to see something along the lines of three positive days in a row to truly believe it because there has been so much structural damage.
Short-term rallies probably lead to shorting opportunities on signs of exhaustion. But at this point, we have to be very cautious. Brent, of course, will follow the light sweet crude market. But right now, I think oil probably goes much lower after bouncing a bit. If Brent were to overtake the $70 level, that could change the overall outlook. But right now, we’re nowhere near doing that.
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