Crude Oil Price Outlook – Crude Oil Continues to Struggle

WTI/CL Technical Analysis

The light sweet crude oil market is fairly quiet in early trading here at the beginning of Wednesday, as we just don’t see much in the way of momentum. This is interesting, considering that we had rallied for several days and then yesterday, on Tuesday, got absolutely slammed at resistance. The question is, are we going to try to bounce from here? It’s possible, but I think the real question is, can we break above the 50 day EMA? As things stand right now, it does not look likely. And I think what we are trying to do is form some type of trading range, perhaps between $65 above and $62 below.

Brent Technical Analysis

The Brent market is sitting right on the $67 level, an area that’s been interesting multiple times in the past, but it too is essentially doing nothing. And I think in this environment, it just tells you that there’s nowhere for the market to be. I think we are trying to carve out a range here as well, with $65 on the bottom being support and $69 on the top being massive resistance. Demand is a question, but really the biggest problem we have right now is supply, with OPEC, the United States and Russia all just flooding the market with crude oil.

I think there is going to be a significant amount of downward pressure on crude oil for the time being. I don’t know if we break down because there is a point where it starts to hurt everybody involved. But I think rallies at this point in time are going to struggle as well. This looks a lot like a market that’s going to coil and perhaps go sideways in a grinding motion for some time.

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