Crude Oil Forecast, Technical Analysis 16th Jan 2014

The light sweet crude markets had a very strong day during the session on Wednesday as we managed to push the market back above the $94 level. The gain of 1.85% was impressive, however we still see a significant amount of noise between here and the $96 level. Because of that, we’re still not convinced and are not ready to start buying this market quite yet. Quite frankly, we would not be surprised at all to see this market for some type of resistant candle above, and because of that believe that the sellers could take control yet again given enough time.

The market certainly is bearish, but this is going to come down to a lot of headline noise as there is talk of the Libyans adding more oil to the market, as well as the possibility of Iranians doing the same as the nuclear deal continues. If those talks produce some type of favorable result for the Iranians, that will only increase supply. Nonetheless, until we get above the $96 handle, we have to believe that the most likely direction will be down going forward.

Crude Oil Forecast January 16, 2014, Technical Analysis

Brent

The Brent markets as you can see had a positive session as well, testing the $107.50 level. We did pullback from there, and at the end of the day although the session looked rather positive, it also looks like a continuation of the consolidation area that we have been in. Granted, the consolidation does have a little bit of a negative “slant” to it, so there is the possibility that we just simply continue to grind lower on short time frames. We believe that this market will continue to struggle overall, and as a result think that it’s probably going to be best traded to the short side on those aforementioned short-term charts. Day traders will continue to like this market, but as far as a longer-term trade, you’re probably going to be hard-pressed to find one that you will be comfortable with because of the large amount of both supportive and resistive areas in this general vicinity.