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Christopher Lewis
Oil

WTI Crude Oil

The West Texas Intermediate Crude Oil market went back and forth rather violently during the week, initially gapping down roughly 30% to kick off the week. Saudi Arabia has started a price war and it’s possible to think that the market sees more pain ahead. I think at this point it’s obvious that rallies are to be sold into, and even if we do rally for the next week or two, it’s probably going to struggle to get above the $42 level as that downward gap should cause major selling pressure. Signs of exhaustion will be sold into and an economic slowdown is of course going to crush demand. If Russia and Saudi Arabia can come together though, that may help drive the market to the upside.

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WTI Oil Video 16.03.20

Brent

Brent markets gapped lower to start out the week underneath the $40 level. It even broke down towards the $31 level, before bouncing significantly. At this point it’s likely that the Brent market will follow whatever the WTI market does, and of course this is a very negative chart, but markets can’t go in one direction forever. I anticipate that we will eventually get some type of bounce, but that bounce will be sold into a little bit later. If the markets break down below the $30 level, then it’s very likely that the market probably goes looking towards the $25 level. At this point in time, I would anticipate a lot of volatility to say the least. Longer-term traders are still going to be looking for stability before buying and holding.

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