Crude Oil Price Forecast – Oil Continues to Build The Case For a Potential Breakout

WTI Crude Oil Technical Analysis

The WTI oil market pulled back just a bit during the trading session on Friday as we continue to see a lot of noisy behavior. All things being equal, this is a market that I think you were hanging around the 200 day EMA. The 200 day EMA of course, will continue to show a bit of magnetism for price. Underneath, we have the 50 day EMA and that comes into the picture as support as well.

In general, this is a market that I think will continue to be very difficult to short and therefore as we drop like this, I continue to buy and then get rid of the position towards the top of the range. When you look at the longer term chart, we are forming a bit of an inverted head and shoulders or some type of rounding bottom. If we can break above the $80 level, then it’s likely that $85 would be targeted here in the WTI grade.

Brent Crude Oil Technical Analysis

Brent is in the same situation, it is hanging around the 200-day EMA with the 50-day EMA underneath offering support right along with the $80 level. For me, the $84 level above is a significant barrier, and if we can break above there, then 89 could be targeted. Short-term dips continue to be buying opportunities and I do think that although it will be very noisy, there are a lot of reasons to believe that oil is going to rally.

Number one, there is seasonality, there’s this time of year that a lot of oil demand picks up. Furthermore, supply has been dwindling a bit. And then of course, we have central banks around the world looking to cut rates, which in and of itself could drive up demand as economic activity starts to increase. With that being the case, this is a market that I do think breaks out and goes higher eventually. So in the meantime, I’m just simply buying dips and taking advantage of the short-term charts.

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