Crude Oil Price Outlook – Crude Continues to Build a Base

WTI/CL Technical Analysis

The light sweet crude oil market has initially gapped higher and then rallied a bit, but we are still within the range from the previous session. So, it’ll be interesting to see how this plays out. I think at this point in time we have a situation where traders are going to continue to look at this through the prism of whether or not we are building some type of consolidation area, or are we in fact really trying to get moving to the upside?

All things being equal, I think you have to look at the market as trying to sort out whether or not we are going to continue to see the $65 level as a major resistance level and the $60 level underneath as major support. All things being equal, this is a market that is first going to try to stabilize and then perhaps try to take off. Crude oil, of course, does have a cyclical time of year, which is starting right now, where demand picks up. And I think that’s part of what we are seeing. Furthermore, things had gotten so negative that sooner or later we had to see some buying. $60 continues to be a major support level, long-term speaking.

Brent Technical Analysis

Brent markets look the same from a structural standpoint, but in Brent we have the $70 level as major resistance. If we can break above $70, I could send Brent much higher. But right now, I think we’re looking at a range between $60 on the bottom and $70 on the top. And as we are in the $67 region, we are just slightly above fair value. And therefore, I don’t really want to get overly aggressive at this point.

I think we are probably going to spend more time going sideways than anything else at the moment, as the first step, at least, of trying to recover. If we get trade deals announced coming from the Trump administration and major economies, crude oil will start to rally.

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