WTI Crude Oil Forecast: January 2024

• The West Texas Intermediate Crude Oil market has spent most of December recovering from an initial plunge lower.
• As we head into the new year, it’s going to be very interesting to see how this plays out, because the $68 level has proven itself yet again to be supported.
• It’s an area that has been major support multiple times in the past, so I think we have eventually found the bottom as things stand right now.
• Having said that, it doesn’t necessarily mean that January is going to be a great month.



January Could Be Noisy

Keep in mind that a lot of what we are seeing is not only structural support but there’s also the possibility that January could be very noisy because if we are trying to turn things back around, there is going to be a certain amount of chopping that is going to have to happen. I recognize that the $75 level is a significant barrier to overcome, and it would not surprise me at all to see this market pull back just a bit to build up the necessary momentum. If we can take out the $75 level to the upside, then we could go looking to the $79 level above which has been a bit of a barrier as well.

Keep in mind that the Federal Reserve cutting interest rates in 2024 could provide a little bit of a boost for crude oil because the idea extrapolates like this: The Federal Reserve cuts rates, and therefore traders are willing to take a little bit of risk, as the idea is that more money goes flowing into the economy, and therefore more economic activity happens. As a result, more economic activity demands more crude oil. Whether or not that plays out is a completely different story, but I think at this point you have 2 assume that’s what most traders are thinking.

Furthermore, it is probably only a matter of time before OPEC cuts production again because they cannot be happy about the way Price has performed in the 2^nd half of the year 2023. At this point, I do think that crude oil will be a bit of a “buy on the dips” market for January, but I also expect it to be a very noisy affair.