WTI Crude Oil Forecast: Continues to Grind

The West Texas Intermediate Crude Oil market has gone back and forth over the course of the trading session on Monday, as we continue to hang around the $85 level. $85 level is an area where we’ve seen a lot of noise, so I do think at this point it’s very likely that we continue to see a lot of volatility. After all, we have a lot of different things moving at the same time that will continue to cause chaos.

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The West Texas Intermediate market has a lot of different things to pay close attention to, not the least of which is going to be the fact that it is likely that the global economy is going to continue to struggle, and if that’s going to be the case, it makes quite a bit of sense that we would see crude oil demand dropped. That’s part of what we are seeing on the chart, but at the same time we also have OPEC cutting production by 2 million barrels a day. Obviously, that causes a supply crunch as well.

It’s in this environment that we are trying to sort out what’s going to happen next. The 50-Day EMA sits right around the $87 level and offers a short-term resistance barrier. Underneath, we have roughly $83 offer in support over the last couple of days, if we break down below there then it’s possible that we could see oil drop down the $80 a barrel. $80 of course is an area where you would see a lot of noise and psychology come into the picture, so pay close attention to that as a potential signal one way or the other.

• I think this is a situation where you are going to have to look at the market through the prism of short-term trading, and perhaps even range bound trading.
• If you like that type of trading, oil is a great market at the moment.
• However, being aware of the fact that if we were to take out the 200-Day EMA, near the $92.50 level, then the market could take off to the $100 level.
• As we continue to see tight financial conditions, most traders are betting on a slowing global demand scenario. Regardless, do not play this market with huge positions, you simply have no real clarity at the moment.

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