The crude oil markets have been negative during the week, as we have broken below an uptrend line recently, and have retested it during this week, only to fail again. This is a negative sign.
WTI Crude Oil
The WTI Crude Oil market fell significantly during the week, as we have tested the previous uptrend line, but found it to be resistive as one would expect. Technically speaking, this is a very negative sign and I anticipate that oil will roll over from here. That’s not to say that it will be easy to trade this market, but I do think that there is quite a bit of negativity. I believe that if we continue to go down to the lower part of the candle, I think we will then reach towards the $50 handle. Ultimately, I have no interest in buying this market, and if the US dollar continues to strengthen, that could also put pressure on this market.
Brent markets also fell, as the uptrend line has been tested for resistance, the sellers came in and jumped all over the market. I think that the market will probably go down to the $60 level next, perhaps the $55 level after that. The market continues to be very noisy, but I think that the rising US dollar is the least of the issues. The market will continue to see concerns about the tariffs being placed in the United States, as it could spread into the petroleum markets. If that’s the case, things could get ugly really quick, driving down global demand. However, I think that at this point the biggest problem is going to be the oversupply of crude oil, which of course is the most fundamental driver.