Crude Oil Price Outlook – Crude Oil Continues to See Troubles

WTI/CL Technical Analysis

The light sweet crude oil market initially rallied a bit during the course of the early hours on Friday, but the $60 level seems to be a bit of a barrier to overcome. If we can break above $60, then I think the light, sweet crude market will do fairly well and probably start grinding its way back towards the $65 level. If we break down below the bottom of the candlestick for the trading session on Thursday, that would be a very negative sign indeed.

But one thing that I do notice is that as we get close to the $60 level and fall below there as well, volume does pick up. So, I certainly think somebody’s in there trying to keep this market afloat. Keep in mind that demand for crude oil is a major problem right now with the world slowing down and of course, OPEC still pumping oil out in large quantities. So that, of course, is something to pay close attention to, but we are in the midst of possibly forming a little bit of a double bottom.

Brent Technical Analysis

Brent markets look very much the same as they had bounced from the $60 level on Thursday and on Friday tried to continue that move, which had fallen a bit. Are we forming a bit of a double bottom at the $60 level in Brent? It’s very possible, and this is something that I’m watching. It’s also worth noting that the last couple of significant drops have seen a lot of volume on days that we have turned things around. I do believe somebody big out there is trying to keep this market afloat.

Again, the question of demand is still a major problem. But at this point in time, it certainly looks like best case scenario for the crude oil markets is that they end up being somewhat range bound, and we form a bottoming pattern. We had attempted to do that previously and it failed. So, sooner or later, the buyers come back. We are heading into a time of year that is typically fairly bullish for crude oil. So that does help. But right now, we have far too much economic uncertainty for people to go all in on the petroleum trade.

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