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Crude Oil Attempting a Recovery
By: Christopher Lewis | November 22, 2022

• Crude oil markets have rallied a bit during the trading session on Tuesday, after forming a massive hammer on Monday.

WTI Crude Oil Technical Analysis

The West Texas Intermediate Crude Oil market has rallied a bit during the trading session on Tuesday, after forming a massive hammer on Monday. Keep in mind that there were rumors floating around that OPEC was going to increase oil production by 500,000 barrels, but Saudi Arabia has crushed those hopes. With that being the case, oil prices started to recover.

Ultimately, this is a market that will continue to be noisy, based upon the fact that we are asking questions of global demand, while at the same time we recognize that supply is a bit tight. That being said, it looks like we may have a little bit of a short term rally coming to our way.

Brent Crude Oil Technical Analysis

Brent also has rallied a bit after forming a hammer on Monday. At this point, it looks like we are trying to get back to the $90 level. The $90 level of course is a large, round, psychologically significant figure, and a lot of people will be paying close attention to that level as to whether or not oil can continue to go higher, or if they are going to start selling oil off in that same general vicinity.

Ultimately, this is a market that is trying to form a larger consolidation area, but if we were to turn around and break down below the bottom of the hammer, that could be extraordinarily bearish for this market, and we could see it fall apart at that point. In that scenario, I see Brent dropping below the $80 level. All things being equal, I think you will have an noisy couple of days, especially as Thanksgiving is on Thursday.

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