Crude Oil Prices December 24, 2012, Technical Analysis
Light Sweet Crude
The light sweet crude markets fell towards the $80.00 level during the session on Friday as we then saw buyers stepped in and support the market at that level. Overall, we believe that this market will eventually weaken, but is currently stuck in a consolidation area between $90.00 and $85.00 that he can’t break out up. We certainly don’t expected to do so during the holidays, and as a result we think this will continue to be a relatively choppy and short-term traders market.
Your capital is at risk
Look at this candle though; it does appear that we should continue to see weakness over the next session or two. Today will be Christmas Eve, so the trading hours will be shortened, and the volume will be much less than usual. Because of this, we could see erratic moves with high spreads. In this type of trading environment, you certainly could not be blamed for wanting to stay flat.
A break of the bottom of the candle, which also coincides with the $80.00 level, should see a return to the $86.00 level in relatively short order. Because of this, we think that selling below that level could be profitable for a quick drop in price.
Brent
The Brent markets had a very similar session on Friday, as the $109.00 level provided support. However, it should be stated that the candle was indeed very bearish, and a break of the bottom of it should see this market falling to reach the $180.00 level in relatively short order. Beyond that, we could see a move down to the $106.00 level as well, as it is the bottom of the recent consolidation range that has been so important.
Ultimately, we think that there will be serious concerns with the demand in this marketplace, and as such we think there is a negative bias to this marketplace overall, and as such we are more comfortable shorting this market than buying. In fact, we are not ready to start buying this market until we get a breakout above the $112.00 level as we believe that demand should continue to falter in the near-term in many of the world’s more advanced economies.\