Crude Oil Price Forecast – Crude Oil Continues to Price in Recession

WTI Crude Oil Technical Analysis

The WTI crude oil market fell early during the trading session on Monday, but it does look like it’s trying to find some type of support right around the $71.50 level. At this point, we are massively oversold, and therefore, I don’t think you’ve got a situation where you are going to want to try to catch a falling knife. You want to see some type of momentum reenter the market.

All things being equal, this is a market that I think is trying to price in the idea of a massive recession, and therefore, you’re probably best waiting to see if we can get a longer term signal to turn around.

Brent Crude Oil Technical Analysis

Same thing over here in the Brent market, it looks very weak, and I think ultimately, you’ve got a scenario where traders will continue to see a lot of concerns about whether or not demand is going to pick up. We are starting to leave the summertime, at least in the next month or two, and therefore it’s interesting to see that the pricing of crude oil will probably suffer as a result, so it’s a bit of a one-two punch in general. I don’t have any interest in shorting this market all the way down here, but I would be watching a bounce for a signal as to which direction to go. When you look at the longer term chart, we do have further to go.

The $72.50 level is a target for Brent, while the West Texas Intermediate crude oil market could drop all the way down to the $67.50 level. So, with that being said, I do think that there’s more selling pressure ahead, but I want to see a little bit of a bounce that shows signs of exhaustion when I can start selling. If we get something along the lines of a bullish weekly candlestick, then I’m more than willing to go in the other direction.

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