WTI Technical Analysis
The crude oil market initially did rally a bit during the trading session, but as you can see, it has pretty much fallen apart since the $60 level was tested. The downtrend line is very much intact as well. And of course, we have the 50-day EMA sitting just above there as well. The shape of the candlestick, at least as things stand right now, looks a lot like a shooting star, and that suggests that perhaps we are going to fall from here. If we do, the $57 level could be a target as it has offered pretty significant support recently.
Brent Technical Analysis
Brent markets look very much the same, initially trying to rally, but failing at the downtrend line. Ultimately, I think we probably go looking to the $61.50 level, possibly even the $60 level. After all, this is a market that has been very noisy and sketchy, really, with a lack of momentum. Keep in mind that there is a serious lack of demand for crude oil out there, or perhaps more importantly, there is a massive amount of supply out there that’s just flooding the markets coming out of Russia, OPEC in the United States.
As long as that’s the case, you’re going to have major issues with pricing here; you just won’t be able to see a sustained rally. That’s exactly how I’m playing this market. I am fading short-term rallies that show the first hints of exhaustion. If we can break above $65 in the Brent market, then you might have a case for a little bit more upward momentum, but right now we just can’t hang on to gains in either grade of crude oil.
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