Oil Forecast January 2, 2011, Technical Analysis

Light Sweet Crude

The CL contract fell slightly in very thin trading on Friday. The market continues to look buoyant, but the $100 level above keeps fighting back. The $105 level is actually the top of the resistance as we see it, and the economic slowdowns that are coming in various markets should continue to keep prices lower for the time being. We see this market as being in a downward channel presently, and potentially trying to form a bullish flag. The flag is only confirmed if we can break through this resistance. In the mean time, we can only assume the downward pressure continues.

Oil Forecast January 2, 2011, Technical Analysis
Oil Forecast January 2, 2011, Technical Analysis

Brent

Friday printed a hammer in the Brent markets as the trading volume was very, very thin. The $107.50 level is the midway mark in the recent consolidation area between $102.50 and $112.50, and as a result we are not willing to buy or sell until w get to one of these outer limits. The selling a lot close to the $112.50 level is more our speed.

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