WTI Technical Analysis
The light sweet crude oil market fell significantly during the session, erasing the gains from the previous day. The $60 level now sits as potential support, with the possibility of a drop down to $58.50. Breaking below that could open up further downside. In the short term, price action appears range-bound and choppy—consistent with oil’s long-standing sideways trend.
Although there are occasional spikes, the market remains broadly negative as we are still trying to sort out whether or not the global economy is going to continue to work in an efficient manner, and trade will continue to be open.
Brent Technical Analysis
Brent markets mirrored this behavior, pulling back sharply from the 50-day EMA and wiping out most of the previous session’s gains. The $65 level has acted as resistance, with the 50-day EMA reinforcing that ceiling. A decline from here could send prices toward $62.80, and a break below that may open a path to $60. Short-term rallies continue to offer selling opportunities at the first signs of exhaustion, given the persistent oversupply in global crude production, and the potential lack of demand for oil with the global economy slowing down a bit.
The United States, Russia, and OPEC all continue to produce large volumes of oil, leaving supply conditions heavily imbalanced. Although new sanctions have been placed on Russian exports, such measures have been imposed intermittently for nearly a decade with little lasting impact, as we have seen time and time again. At this point, the oil market is completely saturated, while the demand is a bit dampened.
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