Crude Oil Price Outlook – Crude Oil Drops on Tuesday

WTI/CL Technical Analysis

The light sweet crude oil market has fallen pretty significantly during the early hours of Tuesday as we are now threatening the $58 level. This is a market that has been falling pretty precipitously over the last call it two or three weeks. And now the $60 level, which had once been the bottom of support, looks like it is massive resistance.

Short-term rallies at this point in time continue to suffer in the hands of overall weakness. Russia, the United States, and OPEC are all pumping out massive amounts of oil. So that’s going to continue to pressure the market, especially as there are questions about global demand as the global economy seems to be slowing down. I fade short-term rallies that show signs of exhaustion.

Brent Technical Analysis

The Brent market now finds itself cracking the $62 level to the downside. And much like the other grades of crude oil that I’ve looked at this morning, short-term rallies, I think, end up being selling opportunities, with the $64 level being obvious resistance backed up by even more resistance at the $65 level. At this point, we could break down below $60 and really, I think that’s probably what we’re going to attempt to do.

Whether or not that actually holds up, we will have to wait and see, but I certainly don’t see any reason to be a buyer of crude oil. Quite frankly, yesterday I mentioned that we could rally from here and I’d be looking for wicks to short. So, a wick on the top of a candlestick that shows signs of exhaustion would be a selling opportunity for me. But we didn’t even get that. So that tells you just how weak this market is.

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