WTI Crude Oil Forecast: Continues to Attempt Breakout

The West Texas Intermediate Crude Oil market has rallied slightly during the trading session on Monday, as we continue to try to break above the highs of the previous week. Furthermore, we need to look at this through the prism of an inverted head and shoulders, that of course has been broken. You can see the yellow line that I have on the chart representing the “neckline”, and it’s been cleared. The 50-Day EMA sits right around the $80 level, which is also right there near the neckline as well.

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If we were to pull back towards that area, then I think it’s probably only a matter of time before you see buyers come in and try to step up to pick the market out. A lot of traders are starting to focus on the idea that China is reopening, that could be part of the reason why we see this move. At this point, I think moved to the 200-Day EMA could be somewhat reasonable, but I’m not looking for anything bigger than that. On the other hand, if we were to turn on a breakdown below the lows of last week, then it’s likely that we go down to the $75 level.

• While supply is somewhat tight in the real world, the reality is that crude oil is being priced for some type of major slowdown.
• This means that there will be a lot less demand.
• If there is a significant amount of negativity out there, and if we see economic momentum slowdown, then it means that there will be as much demand for crude oil to move goods and services.
• After all, the supply chain it is starting to report a lot less momentum and US trucking companies are saying that they are running out of pricing power because there just isn’t enough demand.
• As long as we continue to see that type of attitude, it will almost certainly bring down the value of crude oil, even though we have sold off quite drastically to get here.

We need some type of stimulus to get a longer-term uptrend going, and right now central banks don’t look like they are interested in getting involved in that. Granted, they probably will have to sooner or later, but right now, it doesn’t look likely to happen anytime soon.

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