Crude Oil Price Outlook – Crude Oil Jumps on Iran Tariffs

WTI Crude Oil Technical Analysis

The Light Sweet Crude Oil market has been initially negative during the trading session on Tuesday, but you can see it has turned around. There are a lot of things going on at the moment and as you can see, the Light Sweet Crude Oil market has jumped over the $60 level. Mainly, I think the big driver in the last 24 hours has been the United States announcing 25% tariffs on anybody doing business with Iran.

The idea is that perhaps 3.3 million barrels will come off the market every day, and as a result, signs of exhaustion I think will eventually show up because there is still a major glut of oil. Think of it this way: Russia’s been sanctioned for decades, and there’s still Russian oil in European cars. So, I wouldn’t read too much into it. These countries are really good at circumventing these issues. And of course, some countries, like perhaps China, will just ignore that.

So, this is a reaction and is jumping into a zone that I think gets interesting. If we can’t hold on to $60, I think that’s a real sign.

Brent Technical Analysis

Brent markets are testing the $65 level. This is a little bit more important to this market and a breakdown below the bottom of the candlestick opens up the possibility of a move down to the 50-day EMA. That would also test the downtrend line and therefore open up the possibility of a bounce. But if we blow through that, then we go looking at the $58.50 level.

Ultimately, the 200-day EMA is going to continue to be an area that could cause a little bit of headache, but with this, I think you also have to keep in mind that this is a market that has been oversold. Now I think it’s rapidly getting overbought. This is the same story here with Iran and the tariffs. I think it blows over in a couple of days, and we could continue to see that global supply glut.

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