(MENAFN- Daily Forex)

• Looking at the charts, I cannot help but note mild weakness and continued noise around $62 resistance.
• I anticipate fading short-term rallies amid weak demand, steady supply, and global economic softness keeping prices under pressure.

The light sweet crude oil market has fallen just a little bit during the trading session here on Thursday. As market participants continue to see a lot of noise overall, the market had previously tested the $62 level, which of course, is an area of importance as it had previously been both support and resistance. So, market memory comes into the picture.

With this being the case, I think you have to look at the market as one that you will be looking to fade short-term rallies as they occur. Ultimately, I think you have a scenario where the crude oil market is probably stuck with the idea that demand is more likely than not going to be somewhat stymied. And of course, supply is still pretty high.

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All things being equal, the market is going to continue to focus on the fact that, despite the United States levying pretty significant sanctions against Russia, the Russians will get the oil to the market. There are plenty of people out there who are willing to buy. With this, we had that gap higher; we tested $62, and now it looks like we are in the midst of rolling over. If we fall from here, the $58.40 level is roughly where the gap started, and market participants could drive crude oil down to that area. The $55 level underneath there is significant support as well, as it has been multiple times in the past.

If the market were to break down below the $55 level, we could see $42 pretty quickly.

So, this is a market that's on the precipice of trying to do something big. I think more likely than not, though, we end up somewhat range bound and maybe a little softer, likely to fade the rallies than hang on to moves to the upside-because this is an exhausted market that quite frankly doesn't have any real reason to take off, as the global economy isn't necessarily stellar right now. And with Russia, OPEC, and the United States all pumping out as much oil as they can, that will suppress pricing in the long term.

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