The market certainly looks like it’s trying to go bullish at this point in time. I suspect the end of the day tells the story. If we were to fall below the $60 level, that would be pretty ugly.
Brent Technical Analysis
Brent markets find themselves right at the 200-day EMA and looking very bullish. That being said, we are expending a lot of energy on a lot of what-ifs out there, and therefore, if things calm down in the slightest, oil will roll over. This is definitely going to be a situation where the markets are likely to look at the $65 level as very important. If we were to fall back below there, I think you’d see a deep correction.
I don’t see a bullish market for oil, at least not based on most of the fundamentals in the short term. I think a lot of this, quite frankly, is a repricing of the structure of oil in Venezuela, which really isn’t going to affect the markets massively for quite some time. The infrastructure was pretty much destroyed.
Then, of course, the situation in Iran, which eventually they will sell oil to the Chinese or the Russians, who will then turn around and sell it to the Germans or African nations, it all gets out there regardless. I think this is a little overdone. I wouldn’t get in front of this, but on signs of exhaustion, I’d be very interested in having a go at shorting the market.
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