Crude Oil Price Outlook – Crude Oil Drifts Lower on Thursday

WTI/CL Technical Analysis

The light sweet crude oil market has shown itself to be a lot of back-and-forth noisy behavior. The $62 level, of course, is the beginning of a significant support level that drops all the way down to the $60 level. But despite the fact that we’ve given back so much in gains early in the session, I don’t like that. I think it’s not a market that’s breaking down yet, but it certainly looks like it could. We need to recover and close above the $62 level for me to be a bit more confident about bouncing.

I don’t necessarily think that we will fall apart here either. Quite frankly, oil is a market that’s just full of malaise. There’s not a lot of momentum one way or the other. We are still technically in this consolidation range. So, you have to keep that in the back of your mind. But I also recognize that if we break below $60, the bottom is going to fall out of this market.

Brent Technical Analysis

Brent now looks like it is testing the $65 level here. If we break down below here, we could get a drop to the $62.50 level. Short-term rallies continue to be sold into, as we’ve seen earlier during the session. Quite frankly, as we have rolled over into the latest contract and in this market, it is the December contract, we just are starting to roll over and show signs of economic weakness. Maybe part of it is a lack of travel, I don’t know, but really oversupply coming out of Russia, OPEC, and the United States, does not help crude oil pricing either.

So, with that being said, if we can break back above the top of the candlestick that we’re forming right now during the session, then maybe we re-enter this consolidation. But if we break down below $65 and more specifically below $64.33, I think the bottom falls out.

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