Crude oil markets have had a rough week, but it should be noted that as you look at these charts, we have rolled over into the June contract, so it has skewed the candlestick you are looking at for the WTI market. The Brent market remains the same.
WTI Crude Oil
The WTI Crude Oil market has turned around to form a massive hammer which suggests that there is a lot of volatility but at this point it looks very likely that the $30 level above will continue to be resistance, just as the $20 level could be supportive. There might be a little bit of “catch-up” to be had in this market, and at this point, I do believe that there is some selling coming. There is a major gap above, but quite frankly we would need to see some type of massive turnaround in attitude to make that happen.
Brent markets have fallen during the week, as we continue to bounce around between the $35 level and the $25 level. All things being equal though, this does look very negative and I think it’s only a matter of time before we break down below the $25 level to go racing even lower. Quite frankly, there is no demand for crude oil, and we are literally at the point now where they are storing crude oil in pipelines. In other words, we are a long way away from seeing this market turn around. The Brent market is very sensitive to the overall global situation, as it is more representative of Asia and the Middle East. With that being the case, I think we continue to see selling on rallies going forward, and I have no interest in buying until we get some type of major turnaround in economic growth.
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