A Technical Outlook on Crude Oil price

Crude Oil futures have plummeted in recent weeks due to a US supply glut followed by Saudi Arabia cutting its official crude oil prices for Asian markets by $1 a barrel while European customers saw a Saudi Arabian crude oil cut of $0.40.

Low crude oil prices have been supported by a slowdown in China and oversupply from the US, which is exaccerbated by the addition of new pipelines bringing oil to the US from Canada, North Dakota and West Texas. Crude Oil had been flirting with the $90 handle for past four weeks. It managed to break this psychological support level last week and this week has seen it trading comfortably below that level. A rise in the Greenback over the past few months has also helped global crude oil prices to decline.

The monthly charts show a very bearish picture for Crude Oil. We notice an almost symmetrical triangle pattern being formed, with prices recently breaking out of the triangle. This chart pattern, gives a measured target towards $62.45 if the move is indeed successful.

From the weekly charts, Crude Oil closed last week with a bearish engulfing candle and this week is likely to see prices decline further, we can expect to see more declines in Crude Oil in the coming weeks. The next key technical support levels for Crude Oil are at $85 followed by $80, both of the regions seeing sharp reversals previously.