Crude Oil Price Outlook – Crude Oil Continues to Struggle Overall

WTI/CL Technical Analysis

The light sweet crude oil market has pulled back just a bit in the early hours of Friday as we continue to see a lot of noisy trading. Quite frankly, I think this is a situation where crude oil will continue to suffer at the hands of massive drilling by the United States, by OPEC, and by Russia. If that’s going to continue to be the case, I think it’s going to be very difficult for oil to truly take off to the upside.

Rallies at this point in time should see quite a bit of resistance near the $65 level, because not only do we have the $65 level showing previous support and resistance, but we also have the 50-day EMA sitting just above there. Any rally at this point in time would more likely than not show signs of exhaustion, and that sign of exhaustion will be something that I think a lot of traders will be looking to sell into. If we break down below the hammer from the Wednesday session at $62, I believe it opens up even further selling.

Brent Technical Analysis

Brent is very much in the same category here with the $67 level offering a bit of resistance during the day. But if we do break out to the upside, we could go looking to the $68.28 level, where the 50 day EMA currently hangs around. If we break down below the hammer from the Wednesday session as well, then we probably drop down to the $62 level.

Ultimately, this is a market that I think remains choppy and sideways. And of course, we’ll be waiting to see whether or not demand picks up. I think at this point, we’re in more or less a wait and see type of mode. And that might lead crude oil to be more of a back and forth short term scalping type of environment for traders.

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