The WTI Crude Oil market fell initially during the week but found support just above the $51 level to turn around and form a hammer. As the OPEC members have announced that 90% of the oil production cons have been in compliance, well got a boost late in the week. The $55 level above continues to be resistive though, so we need a break above there before we can start buying again. At that point, I would anticipate that the market would reach towards the $60 level above which is the next major area. However, it’s not to be an easy move, because the massive oversupply also causes issues. However, from looking at the charts, it looks as if the buyers still have the upper hand, and should eventually be able to break this market above the $55 resistance barrier.
Oil techinical analysis
Brent markets fell initially during the week but also found support near the $54 level. Turning things around like that and forming a hammer of course is a very bullish sign, and it now looks as if the market may try to reach towards the $60 level. That’s an area that should be resistive as well, and thus it should be interesting to see what happens next. It’s possible that we may see some consolidation and the short-term, and I believe it’s probably easier to trade this market off the daily chart than the weekly chart. Pullbacks should be buying opportunities, but if we break down below the $54 level, the market should then drop towards the $50 handle underneath. Output cut have lifted the market, but quite frankly the supplies have been exploding to the upside and therefore it looks as if this is one of those rallies that will eventually turn around in a very ugly manner. Remember, it doesn’t matter what OPEC does, because the United States and Canada have been drilling drastically, just as Mexico will have been also. It is only a matter of time before the trend falls, but in the short term it looks like the next couple of weeks could be bullish.