On Monday, the West Texas Intermediate Crude Oil market was moderately turbulent during trading as efforts were made to stabilize or possibly recover the market. The $74 level, previously a support, will likely be a point of interest; thus, I believe that a degree of “market memory” enters the picture. Crude Oil Cost Prognosis The crude oil markets are still establishing a foundation.
A break above that level might result in a retracement toward the $78 level. Conversely, should we reverse course and decline from this point forward, the market could descend to the $67.50 level beneath, which has historically been a significant support.
Regardless, there is still considerable apprehension regarding recessionary headwinds and, by extension, crude oil demand. Recently, the market has been pummeled, so a modest recovery would likely make some sense; however, I would be hesitant to become bullish abruptly.
Brent Crude Oil Technical Analysis.
Brent also declined slightly during the trading session, but purchasers quickly regrouped. The area above $78 is noteworthy because it formerly served as support but is now anticipated to become resistance. It is reasonable to anticipate that short sellers will seek to recoup their losses as the holiday season approaches; consequently, volume may become a bit of an issue. In the event of a subsequent decline, the $72 level serves as a substantial support level.
I believe this market will remain highly turbulent as long as liquidity concerns persist and individuals attempt to predict whether demand will increase or decrease. It is possible that there is considerable uncertainty at this juncture; therefore, it is prudent to exercise caution when determining position sizes.
However, a few levels were previously mentioned and will be significant to monitor in the coming weeks. At this time, crude oil is still declining, but we must also consider the support levels beneath our longer-term support levels; therefore, the selling may be nearing its conclusion sooner than it was previously.