Crude Oil Price Outlook – Crude Trying to Test Resistance on Tuesday

West Texas Intermediate Crude Oil

The Light Sweet Crude Oil market had gapped a little bit lower at the open on Tuesday but has turned around to show signs of life again. As we head toward New Year’s Eve, it does make a certain amount of sense that traders are probably a little hesitant to get too involved in the market. And this could be a continuation of the short covering theme that we’ve seen over the last two weeks.

Brent Crude Oil Technical Analysis

Brent markets look pretty much the same. They are a little further below the resistance of the 50-day EMA and the downtrend line. But if we can break that, we could go to $65 before it’s all said and done. I still think you have a situation where you’re looking for signs of exhaustion to start selling again, perhaps sending the market down to the $60 level.

I don’t have any interest in buying oil at the moment. I think it’s just too far of a softened market. And I also recognize that there’s a very high probability that a lot of what we are seeing as far as bullish behavior is concerned, probably is of short covering variety due to the time of year. We’ll have to wait and see whether or not we can pick up any momentum, but as things stand right now, I’m really skeptical of moves to the upside.

Ultimately, I do think that the fundamentals are still very negative. There is far too much supply, especially coming out of places like the United States and Guyana, to have demand overwhelm it. The 50-day EMA and the downtrend line both are sitting just above, and I expect to see signs of exhaustion that sellers will jump on. That being said, if we can break out above there, then the $60 level could be your next major battleground.

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