Crude Oil Price Outlook – Crude Oil Continues to Look Awful

WTI Crude Oil Technical Analysis

The crude oil market was absolutely obliterated in the early hours on Monday as we are now in the process of trying to test the major support in the West Texas intermediate crude oil market of the last two years. Quite frankly, it looks very unlikely to be a market that you can buy anytime soon for anything more than a short term bounce.

If we break down below the $65 level, that would be the next leg lower, and that would be extraordinarily negative. Middle Eastern tensions are at least starting to cool off a little bit, so maybe that helps, but really at the end of the day, the biggest concern here is going to be demand.

Brent Crude Oil Technical Analysis

Brent markets of course look equally as dire. The $70 level underneath is where we have seen a lot of support over the last couple of years. So now the question is will the buyers return? I do suspect that there’s probably a bounce coming, but this is not something I’d be willing to put a lot of money into and quite frankly, I probably won’t trade it at all. However, if I was forced to make a trade, I would think there should be some type of recovery for a short-term smash and grab type of trade.

But if this market breaks down below the $69 level, look out below because it will be like a trap door opening. On any move to the upside, one would have to think that the 50 day EMA is probably about as far as it can go in this environment.

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