WTI Crude Oil
WTI crude oil is trading in an extremely indecisive manner and appears to be waiting on external factors to feed its next move. However, based on the charts and quantitative factors, near-term odds favor a test of at least $68.7 and possibly $68.0 after today’s failed attempt to overcome $70.0 left another long upper shadow on the daily candlestick. The $68.0 target is an important wave projection, retracement, and the 50-day moving average so it is a probable stalling point, at least initially. Settling below $68.0 would open the way for the next leg lower to challenge $67.2 and $66.5.
That said, until prices fall below the $67.87 swing low, which is also in line with the $68.0 target, there is still a reasonable chance for the wave up from $66.92 to extend to $70.4. More recent waves show the connection to $70.4 is made through $69.6, so a close above this would substantially increase odds for a test of $70.4. Even so, key resistance and the gateway for a bullish outlook is $71.2, a level that is still expected to hold, for now.
Brent Crude Oil
Brent’s move up today was a bit bolder than WTI’s but still stalled below $75.1, the 50-day moving average and last level protecting the $75.79 swing higher. The later move up from $74.14 also failed to overcome today’s high and the late pullback setup a wave that projects to $73.9 and lower. Tomorrow, look for a test of $73.9 before prices possibly attempt to reach $75.1 again. A move below $73.9 would call for $73.1, key near-term support, a close below which would clear the way for $72.5 and lower.
Resistance at $75.1 needs to hold on a closing basis for near-term odds to remain in favor of a deeper pullback. Otherwise, settling above $75.1 would call for $75.6 and $76.3. The latter is the gateway for a long-term bullish outlook as discussed in our weekly Commentary and is expected to hold.
This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.