WTI Crude Oil Forecast: Pulls Back For The Third Day In A Row

  • The West Texas Intermediate Crude Oil market has pulled back for the third day in a row to pierce the $87 level, only to find a little bit of support.

Pixabay

  • That being said, we are also paying close attention to the previous downtrend channel, as we are bouncing off of the top of it.
  • The 50-Day EMA is right in the middle of the candlestick, so it all comes together quite nicely.
  • Looking at this chart, it’s worth noting that the $85 level is coming into the picture, and that of course is a large, round, psychologically significant figure and an area that we’ve seen noise at previously.

If we can break above the top of the candlestick for the trading session on Thursday, then it’s likely that the crude oil markets will continue to go higher. That being said, I don’t necessarily think it’s going to be easy to break above the 200-Day EMA, but if we were to break above there, it’s likely that we go much higher. Remember, the 200-Day EMA is widely followed by traders, so breaking above it would attract a lot of attention.

Volatility Ahead

If we do turn around and break down below the $85 level, then it’s likely that we would see this market drop significantly. At that point, the market could open up the possibility of a move down to the $80 level. That could happen, but it’s also worth noting that we have recently had OPEC cut production by 2 million barrels, which of course will have a certain amount of effect on the markets.

On the other side of the equation, traders are obviously worried about demand, due to the fact that the global economy is slowing down. Furthermore, central banks around the order tightening, most specifically the Federal Reserve, could drive down demand for a lot of things. As those things have less demand, it means that there’s less demand for crude oil to move those things. Beyond that, the US dollar has been strengthening, so therefore it takes fewer US dollars to buy a barrel of oil. Ultimately, the market is likely to continue to see a lot of volatility, as we are most certainly in an area that I think a lot of people are paying attention to.

WTI Crude Oil


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