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Crude Oil Markets Continue to Break Down
By: Christopher Lewis | November 28, 2022

• The crude oil market has fallen again during the trading session on Monday, as we continue to see a lot of concerns about global demand.

WTI Crude Oil Technical Analysis

The West Texas Intermediate Crude Oil market has fallen again during the trading session on Monday, as we have broken below the hammer from last week. This has negated a “double bottom” that was potentially set up. At this point, the market is likely to continue going lower due to the fact that we are in the midst of a “demand recession”, as the global economy slows down. Supply has been a bit of an issue, but at this point, it’s likely that we see crude oil continue to struggle. At this point, it’s probably easier to short oil on signs of exhaustion.

Brent Crude Oil Technical Analysis

Brent markets have also broken down to a fresh, new low, breaking below the $82.50 level, an area that was a potential “double bottom” just waiting to happen. Now that we are below the level, it opens up the possibility of a move much lower, with the $80 level perhaps offering a little bit of support between here and there. If we break down below the $80 level, then it’s likely that we could go to the $77.50 level.

Rallies at this point will more likely than not get sold into, because global demand is falling off of a cliff, and China continues to lock itself down, which of course is one of the largest consumers of crude oil in the world. As long as that’s an issue, it’s difficult to imagine how crude oil does fairly well. That doesn’t mean it’s going to zero, just that rallies look suspicious until we can get better signs in the economy, starting with transportation.

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