Crude oil markets initially tried to rally during the trading session on Friday but gave back the initial gains rather quickly as we continue to see a lot of Brownian motion.
WTI Crude Oil
The West Texas Intermediate Crude Oil market initially rallied during the day on Friday but gave back gains rather quickly in order to show signs of hesitation yet again. There are some concerns that Russian production is going to increase by 50% in the Ural regions. Despite that, the market still sits above a rather significant support level. We don’t really know what to do with oil at the moment, and I suspect that we are waiting for the FOMC meeting and statement, perhaps giving a bit of a “heads up” as to where the demand picture will start to come into the equation.
Brent Crude Oil
Brent also tried to rally began back gains at the crucial $89 region, as we continue to bounce around between there and the 50-Day EMA. As the market continues to go back and forth, it will try to find its directionality, but right now I think we are also waiting on the FOMC, as demand globally will have a lot to do with where we go next. If the Federal Reserve remains tight for longer, they are in fact going to slow down not only US trade, but global trade.
Crude Oil Technical Outlook
- If we break down below the 50-Day EMA, then it’s likely that this market goes down to the $80 level.
- While we did have an inverted head and shoulders above charts, the follow-through seems to be lacking, suggesting that perhaps we are more likely to go sideways than to take off to the upside.
- Either way, we probably have a couple of days ahead of us that will be back and forth.
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