Crude Oil Price Outlook – Crude Oil Relaxes After Ceasefire

WTI/CL Technical Analysis

The light sweet crude oil market has fallen again after gapping lower on Tuesday, as we continue to see a lot of the tension from the conflict between Iran and Israel dissipate as a ceasefire has been agreed to. The market found itself near the $65 level, which is the previous resistance barrier of the potential inverted head and shoulders, which did hit that target. The $65 level has been important for quite some time, so we have completely given back that premium due to the war.

That being said, I think that inflation and perhaps economic growth might drive oil a little bit higher, but I think we are entering a time when we are probably going to stabilize first and then grind higher. I’m not looking for a massive move to the upside. I just think that eventually we will settle down and start to look to higher demand in the summertime. The next day or two are probably going to be dedicated to determining whether or not the $65 level will be reliable.

Brent Technical Analysis

Brent markets have fallen towards the $68 level and the 50 day EMA as well for all of the same reasons as the other contract. Again, I think this is a market that probably gets a little bit of a bid over the next several months, but that doesn’t necessarily mean that we are going to shoot straight up in the air like we did before.

That being said though, if the war does flare back up, then obviously that could have a major influence on buying pressure in the oil market. We have given back quite a bit of the wartime premium, if you will. And now we are testing the area that previously had been significant resistance, which should now be support. If it stabilizes here for a couple of days, then I’ll be looking to buy Brent. To be honest with you, in this environment, it’s almost impossible to trade crude. It’s just far too dangerous.

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