Crude Oil Price Outlook – Oil Continues to See Basing Pattern

WTI/CL Technical Analysis

The light sweet crude oil market has rallied quite nicely during the early hours on Friday as we continue to see a lot of noisy behavior between the 50 day EMA and the 200 day EMA indicators. All things being equal, I think this is a situation where short-term pullbacks offer buying opportunities, especially the closer we get to the $65 level, with the $65 level being a major area of interest in the past. That was previous resistance, so, one would assume that we now have market memory offering support there.

Ultimately, I think you have a situation where traders will be looking at that as the floor. And now the question is, can we break above the 200 day EMA? With this, I believe what you have is a scenario where traders are waiting to see, can we break above the $69 level, to be truly comfortable getting aggressively long. Short-term pullbacks continue to offer buying opportunities here.

Brent Technical Analysis

The Brent market looks very much the same and I think you’ve got a situation where traders will continue to look at this as a scenario where we might be trying to get back to the $71 region and then the 200 day EMA after that, which is near the $71.50 level. Anything above there brings a lot of people into the market looking to go long, perhaps reaching towards $80. Currently, there’s no real clear floor in the market. It’s somewhere around $67. And as long as we can stay above there, then we could really start to take off.

But I think you have a situation where you have to recognize that we are certainly looking at this through the prism of a buy on the dip scenario as this time of year is typically a little bit positive for oil and we should begin to grind to the upside.

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