Crude Oil Short-Term Forecast – March 20, 2018

May WTI crude oil fulfilled a highly confluent and extremely important target at $64.0 today when price rose to $63.98. The move up comes after prices broke higher out of the bullish descending flat wedge Friday and then tested and held the pattern’s upper trend line Monday. As discussed in our weekly forecast, $64.0 is the gateway to a stronger and possibly longer-term bullish outlook. A sustained close above $64.0 will open the way for the next major objective at $66.4, with intermediate targets of $64.8 and $65.4 between.

WTI Crude Oil - 0.50 Kase Bar
WTI Crude Oil – 0.50 Kase Bar

Crude oil prices pulled back a bit from $63.98 and confirmed a weak bearish KaseCD divergence on the $0.50 Kase Bar chart. This, and the small wave down from $63.98, indicate there is a modest chance for a larger pullback tomorrow. Initial support is $62.9 and key support for tomorrow is $62.3. A close below $62.3 would call for a larger correction to $61.4, which is most important because a close below this would be an early indication that the move up may have stalled again. That said, the outlook does not become solidly negative until there is a sustained close below at least $60.3.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

The near-term outlook for natural gas became more negative today and prices are poised to test at least $2.70 and possibly $2.66 tomorrow. The small move up at the end of the day indicates resistance will probably be challenged first, but $2.76 and no higher than $2.79 is expected to hold.

The confirmation of a daily evening star and bearish RSI divergence and the settle below the 50-day moving average have opened the way for a continued pullback from Tuesday’s $2.788 swing high. In addition, March 9’s $2.712 swing low was taken out when prices fell to $2.71. This was the first time since February 12, when the upward sloping channel began to form, that prices have fallen below a prior daily swing low. The move down may be corrective, but these bearish factors and reversal patterns have increased odds for a test of major near-term support at $2.66. A close below this would open the way for targets below $2.60 again.

That said, support at $2.72 held on a closing basis and the small move up from $2.71 will probably challenge today’s $2.76 midpoint first. This level should hold, but key resistance is $2.79, near today’s open. A close above $2.79 would shift near-term odds back in favor of $2.82 and ultimately $2.87, the key threshold to a more positive outlook as discussed in our longer-term weekly forecast.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

The WTI crude oil forecast remains slightly negative given today’s decline to $60.27 after testing and holding resistance around $62.0. The move down is expected to continue, but a small double bottom around $60.27 indicates prices will probably challenge $61.4 first. Resistance is expected to hold.

Today’s decline to $60.27 fulfilled important projections for recent waves down from $64.24, $63.28, and $62.33 that connect to $59.7 and key support at $59.1. As discussed in the weekly forecast, $59.1 is the gateway for a longer-term bearish outlook. It may take at least another few days to reach $59.1, but a close below this would finally break WTI’s stalemate and open the way for a more bearish outlook.

That said, this afternoon’s move above the $60.85 swing high completes the small double intra-day bottom at $60.27. The pattern’s target is $61.4, which is also in line with today’s open. This level should hold, but a close over $61.4 would call for another attempt at $61.9 and possibly $62.6. The latter is most important for the near-term because it connects to $63.3 and ultimately $63.9, the key threshold for a long-term bullish outlook discussed at length in the weekly forecast.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

Since February 12, April natural gas had risen in a choppy upward sloping range that formed a bearish flag. However, prices broke higher out of the flag today and settled above the pattern’s upper trend line. The flag’s failure to break lower is bullish for the near-term and calls for a larger upward correction before the move down ultimately continues.

The next objective is $2.80, which is the 100-day moving average and a confluent projection for the multitude of waves and sub-waves that formed the flag. A close above this would call for $2.83 and possibly $2.87.

The $2.83 target is a potential stalling point because it is in line with the 62 percent retracement of the decline from $2.983 and the 200-day moving average. If the move up is going to remain a “normal” correction, $2.83 should hold.

April Natural Gas - Daily
April Natural Gas – Daily

Key resistance is $2.87. This is the smaller than (0.618) target for April natural gas’ wave $2.487 – 2.983 – 2.565. Waves that meet the smaller than target typically extend to the equal to (1.00) target, in this case, $3.06. Therefore, should April settle above $2.87 look for prices to rise above $3.00 again.

All of that said, the long-term outlook for natural gas remains negative, and even a move above $2.87 will do little to dampen that. For now, though, support at $2.70 should hold and key support is $2.65. These are the 38 and 62 percent retracements of the move up from $2.565, so far. A close below $2.65 would shift near-term odds back in favor of a continued decline to challenge major support in the low $2.50’s.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

The long-term outlook remains slightly negative for WTI crude oil, but the near-term outlook seems to switch from positive to negative on a day-to-day basis. This generally reflects a market that is unsure of itself and could indicate a trading range is forming. For now, though, given today’s failure to settle above the equal to (1.00) target of the wave $60.13 – 61.97 – 61.1 and the 62 percent retracement of the decline from $64.24, odds have shifted in favor of testing support tomorrow.

The formation of a daily shooting star setup and wave formation down from $63.28 call for $62.0 and possibly $61.6 tomorrow. These are targets for the small wave down from $63.28 and the shooting star’s completion and confirmation points. A close below $62.0 would open the way for $61.1 and $60.7. The latter is most important because it is the smaller than target of the wave $64.24 – 60.13 – 63.28 and connects to $59.2 and lower.

April WTI Crude Oil - 0.35 Kase Bar
April WTI Crude Oil – 0.35 Kase Bar

Initial resistance at $63.0 should hold, but the key level for the near-term is $63.5. A close above this would call for $64.1, the smaller than target of the wave up from $57.9. This level is the key to a bullish outlook because a close above $64.0 would shift long-term odds in favor of a continued rise to $66.5 and higher.

This is a brief analysis for the next day or so. Our weekly Crude Oil Commentary and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

WTI crude oil’s settle below Friday’s $63.1 midpoint and the daily bearish engulfing line is negative for tomorrow’s outlook.

There is immediate support at Friday’s $62.6 open, but the small wave formation down from $64.24 calls for at least $62.3 and likely $61.9. The latter is most crucial for the near-term because it is the 50-day moving average, the 38 percent retracement of the move up from $57.9, and is near last Thursday’s $62.1 midpoint.

April WTI Crude Oil - Daily
April WTI Crude Oil – Daily

A close below $61.9 would open the way for a test of key support at $60.3. This is the 62 percent retracement of the move up from $57.9 and is near calendar January’s open. Settling below $60.3 would shift long-term odds back in favor of a continued decline.

That said, the move down is probably corrective of the move up from $57.9. Today’s $63.5 midpoint and $64.1 open are initial resistance. $63.5 should hold but $64.1 is key. A close above this would call for tests of $64.5 and $65.5, the last levels protecting the $66.39 high.

This is a brief analysis for the next day or so. Our weekly Crude Oil Commentary and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

March natural gas finally settled above February’s 9’s $2.64 midpoint. The move up is most likely corrective of the decline from $3.259 and will continue to be a grind. However, natural gas should now challenge at least $2.71 and possibly higher before the decline ultimately continues.

The wave $2.53 – 2.662 – 2.565 met its $2.65 smaller than (0.618) target today. Waves that meet the smaller than target typically extend to the equal to (1.00) target, in this case, $2.71. This is an important objective because $2.71 is also in line with February 9’s open and is the completion point of the weekly morning star setup.

March Natural Gas - 0.035 Kase Bar
March Natural Gas – 0.035 Kase Bar

Settling above $2.71 would call for a larger upward correction and test of key near-term resistance at $2.81. This is the 38 percent retracement of the decline from $3.259 and the 50-day moving average. For the move down to continue in the near-term $2.81 must hold. A sustained close above this would not doom the move down, but rather dampen the odds for a continued decline to targets below the continuation chart’s crucial $2.522 swing low over the next few weeks.

March Natural Gas - Daily
March Natural Gas – Daily

Initial support is $2.61 and key support for the next few days is the $2.565 swing low. A move below this would wipe out the aforementioned wave up from $2.53 that projects to $2.71 and higher. This would also shift near-term odds back in favor of testing $2.51 and lower.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

The outlook for March natural gas remains negative but the formation of another daily star (in this case a hammer) and the small wave formation up from $2.538 indicate there is still a good chance for the upward correction to extend first. However, as stated over the past few days in our premium analysis and daily updates, unless prices settle above at least $2.65 and likely $2.70, to complete and then confirm the morning star setup, odds will continue to favor a test of key support at $2.52.

Initial support is $2.56, the smaller than (0.618) target of the wave $2.642 – 2.553 – 2.619. A move below this early tomorrow will open the way for $2.52, the intermediate (1.382) target. This is a key objective because $2.52 is in line with the continuation chart’s $2.522 swing low and is also the 62 percent retracement of the move up from $1.611. A sustained close below $2.52 will call for a much more negative long-term outlook.

March Natural Gas - Daily
March Natural Gas – Daily

Should the corrective move up extend and settle above $2.70 to confirm the morning star, odds will shift in favor of a larger upward correction to at least $2.76 and likely $2.81 before the decline continues. For now, given all factors, $2.81 is expected to hold because it is the 38 percent retracement of the decline from $3.259 and near the 50-day moving average. Settling above $2.81 would call the market’s bearish sentiment into question and the likelihood of a near-term decline to targets below $2.52.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

Outlook for WTI

March WTI crude oil’s formation of a second daily star (in this case a hammer), confirmed daily KCDpeak, oversold Stochastic, and failure to break the $58.07 swing low are all factors that indicate the upward correction from $58.07 still has a reasonable chance of extending before the decline continues. However, unless WTI settles above at least $59.8 and more likely $60.4 to confirm the morning star setup (made up of the aforementioned stars) odds will continue to favor a decline.

March WTI Crude Oil
March WTI Crude Oil

Initial support is the $58.39 swing low, and an early move below this tomorrow will call for $58.0, the smaller than (0.618) target of the wave $60.83 – 58.39 – 59.49. This is a key objective because it is the lowest that the initial wave down from $66.66 projection and is the 38 percent retracement of the move up from this past summer’s $43.91 swing low. Settling below $58.0 will open the way for $57.6 and very likely $57.1, the equal to (1.00) target of the wave down from $60.83.

Should the upward correction attempt to extend again tomorrow, look for initial resistance at last Friday’s $59.8 midpoint. This is the completion point of the morning star setup, a close above which would call for the $60.4 confirmation point. The $60.4 level is key for the near-term because it is also sitting just above the smaller than target of the wave up from $58.07. Settling above $60.4 would call for a likely move above the $60.83 swing high to $61.4, which is in-line with the equal to target of the wave up from $58.07 and the 38 percent retracement of the decline from $66.66.

This is a brief analysis for the next day or so. Our weekly Crude Oil Commentary and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.

Outlook for WTI

WTI crude oil’s decline wiped out yesterday’s bullish morning star setup and fulfilled the $61.5 larger than (1.618) target of the wave $66.66 – 63.67 – 66.3. If the move down from $66.66 proves to be a three-wave correction the $61.25 swing low should hold. However, as of this afternoon, there is no definitive evidence this will be the case (though an upward correction might take place first as discussed below).

Odds favor a continued decline and a close below $61.2 will open the way for $60.8, $60.2, and $59.3. The next major objective is $58.0, the trend terminus and XC (2.764) projection of the aforementioned wave down from $66.66.

March WTI Crude Oil - Daily
March WTI Crude Oil – Daily

That said, there is a reasonable chance the move down from $66.66 will transmute into a five-wave formation that just completed Wave III at $61.25. If this is the case, then an upward correction to form Wave IV should take place first. Today’s $62.9 midpoint is expected to hold, but the key level is today’s $63.9 open. A close over this would be an early indication that the corrective move down may be complete.

Outlook for Brent

Brent crude oil fulfilled the $65.2 larger than (1.618) target of the wave $70.78 – 67.81 – 70.02 when prices fell to $65.16 today. This is a potential stalling point, but there is no definitive technical evidence that indicates the move down will stall.

If the move down from $70.78 is a three-wave correction of the larger scale move up, then $65.16 should hold. However, this is doubtful because Brent has settled below the $65.6 smaller than (0.618) target of the sub-wave $70.02 – 66.53 – 67.72. This means that this wave should extend to at least its $64.2 equal to target. A close below $64.9 would open the way for $64.2, which then connects to $63.0 and $62.0. The $62.0 target is the next major objective because it is the trend terminus and XC (2.764) projection of the wave down from $70.78 and the larger than target of the wave down from $70.02.

With all of that said, there is a chance the wave down from $70.78 is Wave I of a five-wave pattern that completed Wave III at $65.16. In this case, an upward correction to form Wave IV should take place first. Today’s $66.4 midpoint is expected to hold upon such a correction. Key resistance is today’s $67.2 open.

This is a brief analysis for the next day or so. Our weekly Crude Oil Commentary and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.