If we do pull back from here, I think it’s probably only a matter of time before we find buyers underneath. I would be particularly interested in the $71 level, assuming that it offers enough support to cause a little bit of a bounce. We are in a massive accumulation phase at the bottom of the longer term consolidation, so definitely more buyers and sellers down here in this region. Finally, this is the market bottom for the longer term I believe.

Brent Crude Oil Technical Analysis

Brent is in the same situation, testing the 50 day EMA on Friday, while the $80.50 level above is resistance. I’d be interested somewhere closer to $76, maybe $75 because I think buying on the dip continues to work in Brent as well. Crude oil markets have a lot to deal with right now, not the least of which would be overproduction, a major issue looking at the market right now.

We are producing about three million barrels more a day than necessary around the world, but at the same time, there are shipping concerns. The Red Sea has effectively been nothing but a headache, and quite a bit of the world’s oil flows through there. There was also a certain amount of oil production taken offline in the US as one of the refineries is being repaired. All things being equal, the question now is whether or not central banks can stimulate the economy enough via rate cuts to cause demand for oil to pick up. Looking at the charts, it looks like we will remain somewhat range-bound for the time being.