Oil Price Forecast Archives - Page 12 of 21

WTI crude oil continues to rise ahead of May 25’s OPEC meeting. Market participants are optimistic that OPEC will extend production cuts through the end of 2017. Many hope this will help to ease the global supply glut. U.S. production remains a concern, but for now, oil prices are poised to rise.

Most technical factors are positive. In recent days, July WTI sustained settles above the 62 percent retracement of the decline from $54.45 to $44.13. This is a strong indication that the recovery from $44.13 will continue.

July 2017 WTI Crude Oil - 35-Cent Kase Bar Chart — July 2017 WTI – 35-Cent Kase Bar Chart

Today’s break higher out of another intraday bullish flag and settle above Monday’s $51.43 high opens the way for $52.5. As shown in the chart above, this is a highly confluent wave projection that sits just above the 78 percent retracement of the decline from $54.45 to $44.13. The confluence of wave projections at $52.5 make it a potential stalling point.

Momentum on the KaseCD and KasePO is rising. The KasePO is setup for bearish momentum divergence, a reversal signal that forms when higher swing highs in price and lower swing highs in momentum are made. To confirm the divergence signal, a swing high in price and momentum must form before momentum rises to a new high.

The Kase Easy Entry System (KEES) also triggered a second class buy signal (light blue L) on the 35-cent Kase Bar chart today. A second-class buy signal indicates the majority of momentum indicators KEES examines are positive but that momentum on the synthetic longer bar length is negative. Traders using Kase StatWare may have taken a smaller position and placed a tighter trailing stop. Stops may be widened once the KEES permissions shift to first class (dark blue dots).

For the near-term, the $50.57 swing low is important support. A move below this would likely trigger the bearish KasePO divergence and open the way for a correction to $50.0 and possibly $49.6.

This is a brief analysis and outlook 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.

Last Wednesday, June WTI broke higher out of the intraday bullish flag discussed in the crude oil forecast. The subsequent move up overcame the 0.618 and 1.00 projections of the wave $43.76 – 46.98 – 45.53. However, June stalled at $49.66 before meeting key resistance at $50.1. This is the confluence point between the 1.382 projection and the 62 percent retracement of the decline from $54.14 to $43.76.

Ultimately, June WTI should challenge $50.1. A sustained close over this would be a strong indication the larger scale move down is over, for now. However, bearish KaseCD and MACD divergences on the $0.50 Kase Bar chart call for a test of support first.

June WTI Crude Oil - $0.50 Kase Bar Chart — June WTI Crude Oil – $0.50 Kase Bar Chart

So far, the decline from $49.66 has been reasonably shallow and choppy, indicating it is most likely corrective of the move up. Today, June settled below the 0.618 projection of the wave $49.66 – 48.73 – 49.38 and met the 1.00 projection at $48.5. Meeting the 1.00 projection means the correction may already be complete. However, until prices rise above the $49.38 swing high, odds favor a deeper correction to $48.1 and possibly $47.1.

If the move up is going to continue to $50.1 this week, $47.1 must hold. This is the 62 percent retracement of the move up from $45.53 to $49.66. A close below $47.1 would call for a deeper test of support and possibly for June to challenge the crucial $45.53 swing low.

The long-term outlook for WTI crude oil remains negative and it is too soon to state that a bottom has been made. However, last Friday, June WTI met major support at $43.76, the 1.00 projection of the wave $57.95 – 47.58 – 54.14 (exact projection was $43.77). This was also in the realm of the August 2016 swing low of $44.56 and the 62 percent retracement of the move up from $36.18 to $57.95 ($44.5). The confluence of support between $43.77 and $44.56 and the fact that this range has held on a closing basis favors a larger upward correction before the decline continues.

In addition to meeting support at $43.76, June WTI confirmed daily bullish divergences on the KaseCD and Stochastic and a bullish KasePO PeakOut (oversold signal). These signals call for the upward correction to extend. Most importantly, over the past two days, the pullback from $46.98 formed a bullish intraday flag, shown below on the $0.35 Kase Bar chart.

June 2017 WTI Crude Oil - $0.35 Kase Bar Chart — June 2017 WTI Crude Oil – $0.35 Kase Bar Chart

For now, according to Kase’s price forecasting model, odds are 65 percent for a break higher out of the flag. These odds will increase as prices rise toward the upper trendline of the flag at $46.6.

Important resistance at $47.6 should be challenged upon a break higher out of the flag. This is the confluence point between the 38 percent retracement of the decline from $54.14 to $43.76 and the 0.618 projection of the wave $43.76 – 46.98 – 45.53.

That said, there are some danger signs that indicate the flag, and other bullish technical factors, are on the teetering edge of failing.

The key to a break higher out of the flag and extended upward correction is holding support at $45.5. This is in line with the today’s $45.53 swing low and the flag’s lower trendline. A close below this would call for a test of $45.0, the 62 percent retracement of the move up from $43.76 to $46.98. Settling below $45.0 would shift near-term odds back in favor of testing the $43.76 low again.

This is a brief analysis and outlook for the next day or so. Our weekly Crude Oil Commentary and intra-week 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.

On Tuesday, crude oil prices continued to slip lower. Technical factors indicate June WTI’s corrective decline from $54.14 is poised to extend to at least $52.2. This is the 1.618 projection of the wave $54.14 – 53.14 – 53.8 and the 50-day moving average. A close below $52.2 would call for key near-term support at $51.6. This target is crucial because it’s the 38 percent retracement of the move from $47.58 to $54.14 and the 200-day moving average.

That said, a bullish KaseCD divergence on the $0.35 Kase Bar chart indicates another test of $52.2 and possibly $53.6 might take place first. Resistance at $53.6 is expected to hold. A close over this would call for $54.3. However, a sustained close over $54.0 is the key to a continued rise. This is the 62 percent retracement of the decline from $57.95 to $47.58.

Early Monday, crude oil prices were bolstered again after an announcement made by non-OPEC producers to cut 558,000 barrels per day. This comes after a commitment by OPEC to cut 1.2 million barrels per day. Reports indicate that such cuts will help to rebalance supply and demand by the first half of 2017. However, many market insiders remain skeptical that OPEC and other major producers such as Russia will stick to their agreements and quotas in coming months.

From a technical standpoint, January WTI gapped higher on Monday and met the 0.618 projection of the wave $34.55 – 53.72 – 42.43 at $54.51. This is an extremely important target. Waves that meet the 0.618 projection generally extend to their 1.00 projection, in this case, $61.6. It would likely take weeks, if not months, to reach $61.6. However, upon a sustained close over $54.5, the outlook for WTI would become much more bullish.

Due to the importance of $54.5, a correction is expected before prices rise much higher. So far, prices have fallen to $52.18 and formed a shooting star pattern on the daily chart. This is negative for the near-term and indicates the gap from $51.66 will most likely be filled within the next day or so.

A close below $51.66 would call for $50.1. This was resilient support last week and is the midpoint of December 1. For now, it looks as though prices will try and hold above $50.1 and will likely settle into a trading range between $50.1 and $54.5.

A close below $50.1 would open the way for $48.7 and $47.4. The lower of these two targets is most important support because it is the 62 percent retracement of the move up from $42.95 to $54.51. A sustained close below $47.4 is doubtful in the near-term but would be a strong indication that the move up is over.

This is a brief analysis and outlook for the next day or so. Our weekly Crude Oil Commentary and intra-week updates are a much more detailed and thorough energy price forecast. If you are interested in learning more, please sign up for a complimentary four-week trial.

Crude Oil rose substantially last week after OPEC agreed to cut output by 1.2 million barrels per day. The week posted the largest percentage gain since 2009 and many market participants reportedly expect the move up to continue.

However, others remain skeptical that OPEC members will comply with production quotas. Members have been known to cheat quotas in the past per media sources. In addition, pundits say higher prices would likely encourage more shale production in the U.S., which would ultimately offset OPEC cuts.

Most long-term technical factors are positive. However, WTI is starting to show signs of weakness for the near-term. January WTI’s move up stalled at $52.42 before prices could overcome the mid-October double top at $52.7. To reach the next target at $53.6 soon, January must overcome $52.7 early this week.

That said, the KaseCD momentum indicator is set up for bearish divergence and several momentum indicators confirmed bearish divergences on intra-day charts. Therefore, the correction from $52.42 will most likely extend to last Thursday’s $50.1 midpoint first. A close below $50.1 would then call for $49.5, which is the 38 percent retracement of the move up from $44.82 to $52.42.

Key support for the near-term is $49.1. A close below this would be a strong indication that without more help from external factors, the move up is over, for now.

The rise in crude oil prices last week was reportedly due to increased hopes that major producers will reach an agreement to cut production. However, others’ skepticism about such a cut, the surging U.S. dollar, and a surprisingly large increase in U.S. oil supplies are said to have kept a lid on the move up so far.

On Monday, January WTI settled above the 50 percent retracement of the decline from $52.74 to $42.95 and the 0.618 projection of the wave $42.95 – 47.12 – 45.18. January also settled above the midpoint of the week ended November 4. In addition, KaseX, which uses a combination of Kase StatWare signals, triggered a buy signal (green triangle).

The move up is now in position to challenge key resistance at $49.1. This confluence point is near the 62 percent retracement of the decline and the 1.00 projection of the wave up from $42.95. It is also just above the open for the week ended November 4.

The confluence and importance of resistance around $49.1 make it a potential stalling point. However, a sustained close over $49.1 would indicate a more substantial correction and potential recovery to challenge recent highs is underway.

Initial support is near Monday’s $47.5 midpoint and the 21 percent retracement of the move up from $42.95. This level should hold. Key support for the next few days will be $46.5. This is near Monday’s open and the 38 percent retracement. A close below $46.5 would indicate the corrective move up is over and that another test of major support is about to take place.

Crude oil prices continue to decline. Reports indicate the primary culprit is waning expectations for a meaningful OPEC output cut. In addition, some see record level production from countries like Russia and Canada as an equalizer to any cuts that may be made. There is also added uncertainty as US president-elect Donald Trump has pledged to loosen US drilling restrictions, which could boost domestic output next year.

Most technical factors are also negative. December WTI crude oil is poised to challenge the $41.58 swing low made August 3. This is in line with the 62 percent retracement of the move up from $34.06 to $53.62. Key support is $40.0, the 1.00 projection of the wave $53.62 – 41.58 – 52.22. A close below $41.6 would call for a long-term bearish outlook. A close below $40.0 would open the way for potentially $35.6 and lower.

That said, on Monday the move down stalled at $42.2 and formed a bullish hammer. This is a reversal pattern setup that indicates the upward correction may extend first. The hammer’s completion point is $43.9 and the confirmation point is $44.4.

A close over $44.4 would call for a more substantial correction to $46.0. This is crucial resistance for the near-term because it is the 38 percent retracement of the decline from $52.22 to $42.2. Without a bullish shift in underlying factors, it is doubtful that $46.0 will be overcome.

This is a brief analysis and outlook for the next day or so (in this case, a bit longer). Our weekly Crude Oil Commentary and intra-week updates are a much more detailed and thorough energy price forecast. If you are interested in learning more, please sign up for a complimentary four-week trial.

Traders are reportedly waiting for more information regarding the tentative OPEC deal to cut crude oil production before making up their minds about whether to be bullish. Some pundits say that until the deal is confirmed next month, crude oil prices may continue to soften. A stronger U.S. dollar also reportedly weighed on crude oil prices late last week. However, the dollar has formed a daily evening star setup that suggests it may pull back a bit before rising again.

Last week, December WTI formed a pseudo double top at nominally $52.19 (highs of $52.16 and $52.22). The pattern’s confirmation point is the $49.79 swing low. On Monday, December fell to $49.62 but was unable to confirm the double top with a close below $49.79.

The rally into Monday’s settle confirmed bullish KasePO momentum divergence on the $0.35 Kase Bar chart. It also setup a daily morning star and hammer setup. This candlestick pattern indicates a test of last Thursday’s $51.1 midpoint should take place Tuesday. This is a very important level for the near-term. $51.1 is also in line with an intra-day $51.0 swing high and the 62 percent retracement of the decline from $52.22 to $49.62. A close over $51.1 would call for $51.6 and possibly for the $52.19 double top to be challenged again.

That said, while $51.1 holds, there is still a good chance for the move down to extend because the double top is still intact. A close below $49.79 would confirm the double top and open the way for $49.3 and lower.

Last week, after WTI crude oil surged higher on Monday, prices eased a bit and an overdue correction started. Media sources indicate prices fell due to concern about persistent oversupply. Traders are reportedly waiting for new bullish news to push prices higher. In addition, skeptics remain doubtful that OPEC will be able to follow through on last month’s proposed production cut.

Technical factors show that the correction should extend to at least $49.1. This is because the wave $52.16 – 49.79 – 51.51 met its 0.618 projection at $49.9. Waves that meet the 0.618 projection typically extend to the 1.00 projection, in this case $49.2. This is also near the 38 percent retracement of the move up from $43.77. The confluence point is $49.1.

That said, the correction may be forming a bullish descending triangle. The upper trend line of the formation is $51.1. The move up late today indicates WTI might test this upper trend line before the downward correction continues.

A close over $51.1 would call for the $51.51 swing high to be overcome. This would, in turn, take out the wave down from $52.16 that projects to $49.0 and lower. Therefore, for the move down to continue as expected $51.1 should hold and the $51.51 swing high must hold.

Crude Oil Forecast: July WTI Poised for $52.5

Category: Oil Price Forecast