Crude Oil Price Outlook – Crude Oil Drifts Early on Monday

WTI/CL Technical Analysis

The light, sweet crude oil market has drifted a little bit lower during the early hours on Monday as we continue to pay attention to the idea that perhaps the market has jumped based on nonsense. The sanctions against Russia, of course, are bad, and that does affect supply to a point. But the reality is, Russia has had a ton of sanctions on it for years, and yet still manages to get its oil on the market. So with that being said, I think traders have looked at this and decided that it’s really not going to affect anything by the time it’s all said and done.

And now some of this bullish behavior has been exhausted, and now we find ourselves struggling at the 50-day EMA. I anticipate that if we break down below the lows of the trading session on Monday, we will just continue to drop towards the gap, which would be somewhere around $58.70. Rallies at this point, I think, still have a lot of resistance to chew through, and it will definitely be a difficult trade to take.

Brent Technical Analysis

Brent continues to see a lot of noisy behavior, with the 50-day EMA hanging around, and the $65 level as support. If we break down below the $65 level, then I think you’ve got a very real possibility of dropping down to the $62.25 level, where the gap came. Ultimately, this is the same situation. If we rally from here, Brent could continue towards the 200-day EMA, but it’s definitely going to be difficult.

I think at this point, the market is trying to come to grips with the fact that maybe it overreacted as per usual, and now the adults have come back into the room to at least stabilize things. The situation with supply and demand is still an issue for oil, and it will probably still be for the foreseeable future. So, with all of that being said, I’m looking for an excuse to start shorting.

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