WTI Crude Oil Forecast: Markets Seeing a lot of Volatility - 2 December 2019

Christopher Lewis

The West Texas Intermediate Crude Oil market has fallen rather hard during the trading session on Friday, in what might have been partially due to low volume. At this point, the market looks likely to see speculation on what happens at the OPEC meeting this coming week in Vienna. During the Friday session, there were rumors that OPEC was going to delay extending the production cuts until the April meeting, which had oil falling rather rapidly. However, you should also keep in mind that the low-volume may have exacerbated the entire move.

It’s also worth noting that the $55 level underneath is the so-called “fair value” in the market, as it has been continuing to bounce around between the $50 level underneath and the $60 level above. It also is the scene of an uptrend line, which is the bottom of the overall uptrend and channel. Recently, the market had been a bit close to the top of the range anyway, so most of this move shouldn’t be a huge surprise. If we break down below the uptrend line underneath, the market probably goes looking towards the $52.50 level, and then possibly even the $50 level after that. To the upside, if the market was to bounce above the 50 day EMA then it’s likely that the market goes looking towards the $58 level, and then possibly even the $60 level but obviously that would be a very bullish move so they would probably be headline driven.

At this point, the market continues to see a lot of volatility, and choppy behavior. It is because of that it is crucial that you keep your position size somewhat small. Ultimately, this is a market that will continue to see a lot of back and forth trading, but I do think by the end of next week we should have more clarity. In the short run, it’s probably best to leave it alone or at least pay attention to the trend line that I have marked on the chart. If we break down through there, then $2.50 lower is probably the target. If we bounce from there, then we probably go looking towards the top of the wipeout candle from the Friday session given enough time. Until then, clarity is probably something that will be lacking in this market as there are so many different things working for and against the price of oil at the same time.

Crude oil

About the Author
Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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