Crude Oil Technical Forecast February 24, 2017
WTI Crude Oil
The WTI Crude Oil market rallied during the day on Thursday, as crude oil inventories rose less than expected. However, the $55 level seems to be a very hard resistance barrier to break above, so it’s not surprising to me that we continue to go back and forth. Short-term selling opportunities that use the $55 level above as a barrier might be a good way to play this market, but I believe that you’re going to have to shoot for short-term charts at best. If we do banish a break above the $55 level on a daily close, I would then be a buyer as the market should then reach towards the $60 level above. No matter what happens, I think you can count on quite a bit of volatility, as we have seen repeatedly in this market place.
Brent markets also rally during the day, but as you can see the $57.50 level above continues to offer resistance. I think that if we can break above there, the market should then reach towards the $60 level. It is a market that seems to be very volatile, but I think the buying pressure is probably going to continue, but given enough time the sellers should take over again. And the short-term, it looks as if the market is going to continue to chop around, and this will make for very interesting trading conditions.
The $55 level underneath should be supportive, and I believe is essentially the “floor” in this market. If we break down below there, the market then should reach down to the $53.50 level after that. Either way, I think that you have a bit of a “to speed” market now, as shorter-term traders are trying to push higher, and longer-term traders are probably setting up for a bearish move. Most of the market participants that I know continue to point towards the massive oversupply that we have seen and the gasoline inventories in the United States not suggesting that demand is going to pick up with any type of significance.