Crude Oil Prices forecast for the week of December 24, 2012, Technical

Light Sweet Crude

The light sweet crude markets had a bullish week as we slammed into the $90.00 level. The $90.00 level continues to be significant resistance, and as such we feel that we continue to grind sideways between $85.00 and that level. Because of this, we feel that the longer-term trader is going to struggle with a decent trade set up in the near-term. After all, we are heading into the lowest the volume time period of the year. The next week or two are going to be very then, and as a result the moves could be very unreliable.

However, having said that we see the potential for news flows to drastically move the markets, and as a result this will be a difficult market to trade for the next two weeks. Going forward, we think that this market will be decided by either a breakout above the $94.00 level, as we see quite a bit of noise between here and there, or a break down below the $85.00 level as markets would start to fall apart and aim for the $80.00 handle. 

Brent

The Brent markets had a positive week as well, but gave back enough of their gains in order to form a shooting star just below the $110.00 level. Because of this, this market does in fact look bearish at the moment, but we see significant support right around the $105.00 level, and as a result we think that this setup is more or less a shorter-term type of trade. Because of this, it is to be very difficult for the longer-term traders to make any significant moves in this market, and this is especially true over the next two weeks.

We do see the consolidation between the $105.00 and $112.00 level as a signal in and of itself. If we do manage to break out in either direction, we would simply follow as it will take a significant change in conviction for this market to do one or the other. Until then, this market will be choppy and far too messy for the longer-term trader.