Crude Oil Weekly Price Outlook – Crude Oil Has a Tough Week

WTI/CL Technical Analysis

The light sweet crude oil market initially did try to rally a bit during the early part of the weekend. We even broke above the $65 level. The $65 level, of course, is a large, round, and psychologically significant figure and an area that has been quite a bit of both support and resistance.

Ultimately, we ended up rolling over and forming a very dire looking candle. So, it would not surprise me at all to see this market head back to the latest swing low, which is right around $61.50, maybe $62. Really at this point in time, the biggest problem of course is going to be oversupply.

Brent Technical Analysis

Brent has done the same thing. We rallied initially and then broke down rather significantly to form a fairly ugly candlestick. Oil is oversupplied in the sense that the United States, OPEC and Russia are all pumping out large amounts and they will drive the price down eventually. I think you have a situation where you start to rally and then you show signs of exhaustion time and time again. I just don’t see how oil takes off to the upside without some type of external factor really driving things.

The one time that we’ve seen it over the last year or so, where we got really out of control to the upside, was when Israel and Iran were attacking each other. Now that that has stopped, we are starting to focus on the fact that there’s far too much oil out there. And I think you continue to fade rallies every time they appear.

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