Crude Oil Price Forecast – May 19, 2020

Author: Dean Rogers, CMT

Dean Rogers, CMT is the general manager of the Kase Call Center in Albuquerque, New Mexico. He oversees all of Kase and Company, Inc.’s operations including research and development, marketing, and client support. Dean began his career with Kase in early 2001 as a programmer but has developed into Kase’s senior technical analyst. He writes Kase’s award-winning weekly Crude Oil, Natural Gas, and Metals Commentaries. He is an instructor at Kase's classes and webinars and provides all of the necessary training and support for Kase's hedging models and trading indicators for both retail and institutional traders.

WTI Crude Oil Price Forecast

The long-term outlook for WTI crude oil is bullish, and based on technical factors, the move up is still poised to challenge the next major objective at $35.1. However, several daily momentum oscillators are overbought, and today’s evening star setup suggests the move up is nearing exhaustion. The challenge, however, is that on the intra-day chart the evening star forms a bullish pennant. Pennant’s normally break in the direction of the trend, in this case, up. A close above $32.6 will confirm a break higher and clear the way for $33.3, $34.2, and possibly $35.1 during the next few days.

WTI Crude Oil – $1.00 Kase Bar

Nevertheless, July WTI’s wave structure up from $17.27 is due for a larger test of support before overcoming $35.1. Also, due to the overbought momentum conditions, this is a case where the bullish coil may fail. Any move down will most likely be corrective and should attract new buyers. Even so, should WTI fall below $31.2, look for $30.8 and possibly $29.9. Closing below $29.9 will open the way for $28.7 and possibly lower before the move up ultimately continues.

Brent Crude Oil Price Forecast

Brent leans a little less bullish than WTI for the near-term, but the overall outlook remains bullish. A move above $35.7 will clear the way for a push toward $36.5 and $37.7 during the next few days.

That said, daily momentum oscillators are overbought, and today’s evening star setup suggests that there is a good chance Brent’s corrective move down from $35.76 will extend first. Support at $33.8 is expected to hold and $32.9 is key. Settling below $32.9 will shift near-term odds in favor of $31.8 and possibly $31.0 before the move up continues.

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

This is a brief analysis for the next day or so. Our weekly Metals Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key COMEX precious metals futures contracts and LME Non-Ferrous (Base) metals, spot gold, the gold/silver ration, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial.

Gold broke higher out of a coil pattern and settled the day above $1737, the smaller than (0.618) target of the wave up from $1666.2. The move up is now poised to reach at least $1752 and likely $1774 during the next few days. Settling above $1774 will clear the way a new high of $1802 and then the next major objective of $1821.

Prices are still flirting with the coil’s upper trend line, so there is a modest chance for another test of support once $1752 is met. Support at $1720 will likely hold, but a decline to $1702 and even $1690 would still be considered corrective of the move up from $1676.0. Settling below $1690 is unlikely but would shift near-term odds in favor of $1658 and possibly lower.

Gold – $10 Kase Bar Chart

June natural gas broke support at $1.66 and fell to a new contract low of $1.595. Based on the waves and sub-waves down from $2.162 this is a highly confluent objective and a potential stalling point. Nonetheless, closing below $1.59 will call for $1.53, the last target protecting the continuation chart’s $1.519 swing low. Settling below $1.519 remains doubtful, but would clear the way for $1.45 and possibly $1.40.

Natural Gas – $0.035 Kase Bar

There are no bullish signals or patterns that suggest the move down will end. However, the wave structure down from $2.162 lacks a definitive test of resistance and is due for an upward correction before prices push much lower.

Prices have risen late this afternoon and will probably challenge today’s $1.66 midpoint early tomorrow. Rising above this would call for a test of $1.71. For now, $1.71 is expected to hold, but a close above this would call for $1.81. This is the 38 percent retracement of the decline from $2.162 and must hold for the move down to extend during the next few days. Settling above $1.81 would imply the decline has stalled again and would call for a much more substantial test of resistance in the coming days and possibly weeks.

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.

WTI Crude Oil Price Forecast

WTI rallied today but stalled short of the crucial $26.3 objective. The long-term outlook for WTI is bullish, but the move up is still due a larger test of support before rising much higher. In addition, with product prices sliding and a negative near-term outlook for Brent, WTI will be hard-pressed to retain enough upward momentum to overcome $26.3. Therefore, tomorrow’s outlook leans bearish and a test of support is expected.

The move down from $26.23 will most likely prove to be corrective. Nevertheless, a bearish intra-day KasePO divergence and the wave down from $26.23 call for a test of $25.0 and likely $24.2 tomorrow. For the move up to extend toward $26.3 and higher again during the next few days $24.2 must hold. Closing below this will call for $22.5 and possibly $21.0.

WTI Crude Oil – $0.35 Kase Bar

Should WTI rally again and overcome $26.3 early tomorrow, look for prices to push for $27.3, $28.4, and eventually the next major objective of $29.1.

Brent Crude Oil Price Forecast

Not much changed for Brent today. The overall outlook is bullish, but Brent broke lower out of a coil yesterday and the wave formation down from $32.27 calls for a test of $28.7 and possibly $27.7 before the move up continues. The $27.7 objective is expected to hold. Nevertheless, a close below this would call for $26.8 and possibly $26.1.

Once $28.7 is met, odds for another test of resistance will increase. Rising above $30.8 will clear the way for $31.5 and then key near-term resistance at $32.1. Settling above $32.1 will put odds firmly back in favor of a continued rise toward the next major objective at $33.4.

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

Gold’s formation of a bullish engulfing line today strongly suggests that the primary wave down from $1788.8 may fail to meet its $1642 equal to (1.00) target as previously expected. Instead, prices are poised to rise and challenge at least $1752, which then connects to $1764. Overcoming $1764 would call for a move above the $1764.2 swing high. This would invalidate the wave down from $1788.8 and clear the way for $1797 and higher.

Gold – $10 Kase Bar Chart

Nevertheless, the 62 percent retracement of the move down from $1764.2 held today, and the move up from $1683.0 lacks a definitive wave restructure. Therefore, a test of $1710 support might take place first. This level is expected to hold. Key support for the near-term is $1697. Settling below $1697 would shift near-term odds back in favor of a move toward $1642.

This is a brief analysis for the next day or so. Our weekly Metals Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key COMEX precious metals futures contracts and LME Non-Ferrous (Base) metals, spot gold, the gold/silver ration, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural gas could not overcome Tuesday’s $2.162 swing high and make the push for key resistance and the gateway for a much more bullish outlook at $2.21. Instead, prices fell and took out the 38 percent retracement of the move up from $1.649. This is bearish for the near-term but doe not mean that the move up is over. Rather, as suspected for the past few weeks, prices are still settling into a wide and volatile trading range.

Tomorrow, look for natural gas to challenge at least $1.91 and likely $1.86. The $1.86 objective is the 62 percent retracement of the move up from $1.649 and is expected to hold. Closing below this would reflect a bearish shift in sentiment and severely dampen odds for a continued rise during the next few days.

Natural Gas – $0.035 Kase Bar

The move down from $2.162 was aggressive but lacks a meaningful wave formation. Therefore, once $1.86 is met odds for a test of resistance will increase. For now, $2.02 will likely hold and $2.07 is key. Settling above $2.07 will shift near-term odds in favor of another attempt at $2.17 and higher.

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.

WTI Crude Oil Price Forecast

WTI crude oil has adopted a firm bullish outlook for the near-term. Today’s close above $21.8, the equal to (1.00) target of the primary wave up from $6.50), and $24.5, the smaller than (0.618) target of the sub-wave up from $10.07, opens the way for $26.5 and possibly $29.3 during the next few days. Because $29.3 is the larger than (1.618) target of the wave up from $6.50 it is doubtful that WTI will overcome this objective without a major test of support first.

WTI is looking healthy. However, for the move up to continue, or for prices to at least stabilize in the coming weeks, it will be crucial for support around the 38 percent retracement of the move up from $6.50 to hold firm. Breaking the 38 percent retracement would be a significant clue that the market is not ready to sustain higher prices and that fear still has a firm grip on oil traders.

For now, support at $23.0 will most likely hold as prices rise toward $26.5. This was the 62 percent retracement of the decline from $33.15 and is near today’s midpoint. Falling below this would call for $21.7 and possibly $19.2. The latter of these is most important because a close below $19.2 would imply that the move down is more than a simple profit-taking correction.

WTI Crude Oil – $2.00 Kase Bar

Brent Crude Oil Price Forecast

The outlook for Brent crude oil is firmly bullish for the near-term. The wave formation up from $19.99 overcame its intermediate (1.382) target today and is poised to reach the $33.4 larger than (1.618) target. This is a potential stalling point. However, any move down will most likely prove to be corrective and is expected to hold $28.6. Ultimately, closing above $33.4 will clear the way for $34.4 and higher.

As stated, $28.6 is expected to hold, but key support and the barrier for a bearish near-term outlook is $26.9.

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 June gold contract stalled just below the $1741 target discussed in yesterday’s update before falling and taking out the $1704.1 swing low. The move down held key support at $1688. However, this is the smaller than (0.618) target of the primary wave down from $1788.8. Therefore, meeting $1688 implies that a larger downward correction will take place before prices rise to a new high. The next major objective is the $1641 equal to (1.00) target with interposed objectives at $1677 and $1654.

Gold – $10 Kase Bar Chart

The $1688 target is a potential temporary stalling point. Should a test of resistance take place early tomorrow look for $1717 to hold. Key resistance and the barrier for a resumed near-term bullish outlook is $1735. Settling above $1735 would call for prices to rise above the $1737 swing high, negating the wave down from $1764.2 that makes the connection to $1641 through $1677 and $1654.

This is a brief analysis for the next day or so. Our weekly Metals Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key COMEX precious metals futures contracts and LME Non-Ferrous (Base) metals, spot gold, the gold/silver ration, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural gas is settling into a wide trading range as expected. Today, prices fell to challenge $1.86, the 62 percent retracement of the move up from $1.765. This is a potential stalling point but based on the waves down from $2.100 and $2.018 odds lean in favor of falling to $1.82. A test of resistance is expected before prices close below $1.82. Closing below $1.82 would clear the way for $1.69, which is near the bottom of the trading range for the June contract.

Natural Gas – $0.035 Kase Bar

As prices fall toward $1.82 resistance at $1.92 is expected to hold and $1.96 is key. Settling above $1.96 will call for another attempt at $2.03, which then connects to $2.11 and higher. Without help from bullish external factors, it is doubtful that natural gas will overcome $2.03.

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.

WTI Crude Oil Price Forecast

WTI crude oil held crucial support at $11.0 on a closing basis and formed a bullish hammer today. Sentiment remains firmly bearish, but today’s prices action suggests a test of $15.0 will probably take place before prices fall below $10.0. Closing above $15.0 will complete the hammer and clear the way for a test of the pattern’s $16.7 confirmation point. Key resistance and the barrier for a more positive outlook is $17.5, the smaller than (0.618) target of the primary wave up from $6.50. Closing above this would call for WTI to rise toward $21.8.

WTI Crude Oil – $2.00 Kase Bar

Without help from bullish external factors, the move up from $10.07 will likely prove to be corrective. Should WTI close below $11.0 before overcoming $15.0, near-term odds will shift back in favor of $9.9, $8.6, and possibly lower.

Brent Crude Oil Price Forecast

Brent’s held the 62 percent retracement of the move up from $19.99 on a closing basis. In addition, today’s formation of a bullish morning star setup suggest prices will rise to at least $24.0 before the move down continues. Closing above $24.0 will complete the morning star and call for crucial resistance and the pattern’s confirmation point at $24.9. Above this, the barrier for a more positive outlook is $26.2, the smaller than (0.618) target of the wave up from $19.99.

Like WTI, Brent will need help from external factors to overcome $24.9 and eventually $26.2. Sentiment remains bearish, so this will likely prove to be difficult. Should Brent close below $21.7, look for the move down to extend to $20.8 and then $19.9 and lower.

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.