WTI Crude Oil Weekly Technical Analysis
The light sweet crude market did fall during the bulk of the week, but we are trying to save ourselves here at the $55 level in the form of a hammer for the week, possibly. This could be a buying opportunity, but the fundamentals don’t line up very well. So, I think momentum would be a major problem here. We have a downtrend line that’s been in effect for about two and a half months, and I think that puts a bit of a cap on the market. But most importantly, beyond any line on a chart, is the oversupply of crude oil.
Brent Oil Price Forecast
Every new Brent Oil analysis as it publishes, today's technical signal and key levels, live price — on one page.
See all Brent Oil forecastsThe United States is throwing out 13 and a half million barrels a day now, on its way to 14. Guyana is flooding the market as well. So, I think you’ve got a situation where oversupply will continue to be a problem. In fact, Donald Trump suggested that oil was going to $40, maybe through deregulation in the United States. We’ll just have to wait and see.
Nonetheless, a short-term bounce looks like it’s probably in the cards, but next week is Christmas week, so that obviously dampens the market’s volume and the like, so keep that in the back of your mind. I think any rally at this point in time probably sets up for a shorting opportunity. If we break down below $55, that would obviously be pretty negative.
Brent Crude Oil Weekly Technical Analysis
Brent markets look very much the same. Somewhere around $58, you have a floor from back in April and May, and we did touch that during the week, and we have turned around to show signs of life, so it’s at least fighting back. But again, this is another one of those market situations where it’s probably just a relief rally. I don’t see a reason why Brent takes off without some type of external factor, something along the lines of war, probably.
Ultimately, this is a market that I think is probably in the process of trying to find the multi-month bottom, which means it might get the occasional bounce, but I still look at rallies with suspicion. In fact, you’d have to at the very least break that downtrend line, if not break $65 here to get bullish for any significant amount of time.
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