Crude oil markets broke down significantly during the week, slicing through the bottom of the shooting stars from the previous week. That’s a good sign, and it shows that we could see a lot of volatility going forward. Ultimately, this is a market that I think is focusing on several things at once.
WTI Crude Oil
The WTI Crude Oil market initially tried to rally during the week but as you can see broke apart and felt towards the $70 level. This is an area that should attract a lot of attention, so ultimately I believe that this market is going to continue fighting back and forth. At this point, I think that the Iranian sanctions continue to be a major issue, and I also believe that the lack of global demand could be a major issue as well. Ultimately, this is a market that I think will continue to see plenty of volatility as we are worried about the US dollar, and of course oversupply.
Brent
Brent markets broke down below the $81 level, and then the $80 level. The Brent market was absolutely hammered, so it looks very likely that we will continue to see a bit of weakness. I anticipate that there should be support closer to the $77 level, so I think at this point it’s likely that we see a bit more negativity going forward. I believe there is massive support at the $70 level though, so I think that’s about as far as we go. This is a strong correction, but I think we only have a couple of weeks. Otherwise, if we break down below the $70 level, it’s likely that we could break down rather significantly at that point.
