Crude Oil Price Outlook – Oil Stalls Slightly in Early Tuesday Trading

WTI CRUDE OIL Technical Analysis

The light sweet crude oil market has shown itself to be slightly positive in the early hours of Tuesday. That being said though, the market at this point in time is looking at the 50-day EMA and a downtrend line to come into the picture to offer a bit of a barrier and I think ultimately it is likely that any rally at this point in time will face a significant amount of selling pressure.

The last couple of days have been fairly strong but that makes sense. We are heading into the holidays, and I anticipate that short sellers are starting to cover their positions. We have seen the $55 level hold as support, which is very important support from late in spring. With that being said, I think this market may have a little more upside, but I am looking to fade this rally.

BRENT Technical Analysis

The Brent markets of course look very much the same with the $58 level offering support, and then we have had a nice bounce. We are coming up on a downtrend line and the 50-day EMA, and as we head toward the Christmas holiday again, I think this is short covering; it makes perfect sense.

And now we have to ask, is there an actual reason for oil to go higher? And really at this point in time, beyond short covering, there has not been a whole lot of good news. So, I think you are still in a situation where oil remains weak. It just got a little oversold and people want their money out of the market before we head into a very thin time of year. The next couple of sessions could be somewhat interesting but overall, once we go back to full liquidity, I am looking to sell.

For a look at all of today’s economic events, check out our economic calendar.