Crude Oil Price Outlook – Crude Oil Gives Back Gains on Monday

WTI/CL Technical Analysis

The light sweet crude oil market gapped to the upside just a bit at the open on Monday, rallied to the familiar $62 level, and then turned right back around to show signs of hesitation again. With that being the case, this is a market that I think continues to see a lot of issues. And with that, traders probably look to fade short-term rallies. With this, market participants will be looking at any rally that does occur with suspicion. And if we can break down below the $60 level, I think crude oil might be in a world of hurt.

Brent Technical Analysis

The Brent markets look very much the same as they gapped higher. They rallied a bit and now it looks like they are below the $65 level. The shape of the candlestick does suggest that traders are going to continue to favor the idea of fading rallies, and I think ultimately, we have to watch this area right around the $63 level. If we start to fall from there, then $62 gets targeted and possibly even lower.

Again, I think a lot of this comes down to the idea that perhaps the demand for oil is going to be very weak with a slowing economy. I don’t know if that’s the exact thoughts in most traders’ heads, but that certainly seems to be the way this is going. So with that, I like the idea of fading those rallies, at least until we break above the 50-day EMA in both grades of crude oil.

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