Crude Oil Price Outlook – Crude Oil Falls in Early Trading on Tuesday

WTI/Light Sweet Crude Oil Technical Analysis

The light sweet crude oil market fell pretty significantly during the early hours on Tuesday, as it looks like we are in fact plunging towards the 200 day EMA. I do think there are buyers underneath, and this should end up being a buying opportunity based on the economic and fundamental factors out there. But ultimately, this is a market that just got too far ahead of itself.

A short-term pullback at this point in time did make a certain amount of sense and now I’m going to be watching the $74 region to see if we get down there and bounce. After that, we’ve got $72.50 offer in support as well. In general, this is a market does tend to be very volatile, but we recently formed a major bottoming pattern and now I think we’re just going to see the continuation of that, but a trend doesn’t change on a dime.

Brent Technical Analysis

The Brent market has done the same thing and now it looks like we’re probably going to go down to the 200 day EMA. The 200 day EMA, of course, will end up being a technical signal that a lot of people pay attention to, followed by the $75.50 level, where the 50 day EMA is. All things being equal, I think this is a market that also ends up being a buy on the dip type of situation, as we have recently bottomed out at a major support level in the last couple of years.

And now we’re just simply seeing people take profit, I suspect, or just the fact that the market got too far ahead of itself, it needs to perhaps build up momentum again. Either way, I don’t have any interest in shorting oil. I do think that we drop a bit and then bounce, and that bounce could be what we take advantage of.

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