WTI Crude Oil Outlook – Will Middle East Supply Headlines Force a Breakout Above EMAs?

Crude Oil Technical Analysis

The Light Sweet Crude Oil market has drifted a little bit lower during trading on Thursday in the very early hours. All things being equal, this is a market that continues to see a lot of questions asked about the Strait of Hormuz, and unfortunately, there are no answers. It comes down to the latest headline.

We are watching the 50-day EMA and 200-day EMA indicators act as a bit of a magnet. This drift lower is probably the market just kind of hanging out, figuring out where to go next. PPI numbers come out on Thursday; that could be a mover, although probably not. This has more to do with supply coming out of the Middle East and what that does with US exports. After all, if there is a lack of oil coming out of the Persian Gulf, tankers will reroute to where they can find it.

Middle East Supply Risks and Key Technical Magnets

The Brent market has drifted a little bit lower as well, as it now sits on top of the 50-day EMA, doing the same thing very much. The 200-day EMA is sideways right along with the 50-day EMA, and $85 looks to be a little bit of a magnet for price.

Ultimately, this is a market that could be trying to find a range between right around $92 and $83; we’ll just have to wait and see. But it just looks a little lost. It’s range-bound, waiting for the next shoe to fall, which will come in the form, more likely than not, of a headline crossing the wires from either Tehran or Washington, DC.

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