Oil prices are now trading flat with the range between 41.00 and 42.00 established. After failing to breakout above the 42.00 handle, oil prices pared gains.
But support at 41.00 is holding up for now. This could keep prices somewhat supported to the upside.
However, if oil prices fail to breakout above the 42.00 level, then we expect a potential breakdown lower.
This is subject to the 41.00 handle giving way. It will potentially open the path for a correction toward the 37.00 – 38.00 region where support could most likely be tested.