Crude Oil Price Outlook – Crude Oil Continues to See Problems

WTI/CL Technical Analysis

The light sweet crude oil market fell a bit during the early hours on Tuesday as we continue to see a lot of external pressure. The biggest problem oil faces right now is the fact that OPEC is out there looking to increase production by half a million barrels per day in an environment where there is enough supply to begin with. This does not help the situation. And while we are still in the area that I thought of as a summer range, the reality is that we are very sluggish.

The $65 level is an area that previously has been resistance and should, at least in theory, offer support yet again as well. All things being equal, this is a market that I think will continue to be somewhat choppy and sideways, but really, it’s typically in a range anyways. If we were to break down below the $64 level, then maybe the $60 level gets targeted, but I would anticipate that we will continue to at least attempt to defend the $65 level. And if we in fact do, then we could get a bit of a bounce.

Brent Technical Analysis

The Brent market is very much with the same type of attitude at the moment. With the $68 level offering both support and resistance recently, it does make a certain amount of sense that in this area, we might see some action as well. If we were to break down below the $67 level, then we could drop to $66, followed by $62. All things being equal though, I would anticipate at least an attempt to bounce from here and try to go higher.

I understand that crude oil is in an environment that a lot of people look at as confusing, and therefore it makes a certain amount of sense that we’re just bouncing around and not able to make a bigger move. That being said, pay close attention to more OPEC announcements, but with OPEC producing more and the Americans producing more than they ever have, it’s going to be tough to have sustainable rallies. I think at best we’re just going to stay in the same range.

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