Crude Oil Price Outlook – Oil Still Looking for the Floor

WTI/CL Technical Analysis

The light sweet crude oil market has shown itself to be somewhat stable during the early hours on Friday. But really at this point in time, I think you’ve got a situation where traders are trying to sort out whether or not the $60 level will hold. We are definitely in an area that’s going to be interesting from a longer term perspective. So, I think you have to pay close attention to what happens here. That being said in the short term, I expect more of a sideways choppy market than anything else.

I don’t know how much further we go to the downside because quite frankly, if we break down below the lows of this week, it could open up a move down to the 50 day or to the $50 level. That of course would be a horrible sign for financial assets. On the other hand, if we rally from here, we could go look into the $62.50 cents level possibly even the $65 level. I think volatility and sideways action is essentially what you’re getting to here.

Brent Technical Analysis

Brent looks very much the same as it’s hanging around the $63.50 cents level, with the $60 level underneath offering support. The $70 level above is a significant resistance barrier. It could be a target, possibly, but all things being equal, you have to see this as a market that, quite frankly, is trying to find its footing, just like the light sweet crude market is.

But I don’t necessarily think that this is a market that you need to get aggressive in. It will show its hand, it will go higher or lower, and you’ll just simply follow. $60 seems to be a hard floor in the Brent market for the time being.

For a look at all of today’s economic events, check out our economic calendar.