WTI Crude Oil Price Forecast
The outlook for WTI crude oil is bullish and the recent correction down from $41.63 looks as though it will be short-lived. However, there are still a few negative technical factors that suggest a deeper correction might take place before WTI overcomes $41.2.
The wave formation up from $37.08 challenged its $39.8 equal to (1.00) target and the 62 percent retracement of the decline from $41.63. The next targets for this wave are $40.6 and $41.2, the intermediate (1.382) and larger than (1.618) targets, respectively. The $41.2 target is most important because it is in line with the continuation chart’s March 9 gap down from $41.05. Closing above $41.2 will open the way for $42.4 where the August contract’s gap down from $42.17 will be filled.
Because resistance around $40.0 has held on a closing basis there is still a modest chance for a deeper test of support first. Closing below $38.9 will complete today’s hanging man and a close below $38.1 will confirm the pattern. Support at $38.1 is crucial because it is also the 62 percent retracement of the move up from $37.08. Settling below this will call for $37.3, the smaller than (0.618) target of the wave down from $41.63, which then connects to $35.5 as the equal to target. Such a move would reflect a bearish shift in external factors and near-term sentiment.
Brent Crude Oil Price Forecast
Brent crude oil’s recent move up from $39.7 is poised to challenge at least $42.2. This is the equal to (1.00) target of the primary wave up from $39.7 and the 62 percent retracement of the decline from $43.97. For the corrective move down to extend during the next few days $42.2 must hold. Closing above $42.2, which has better than even odds, will clear the way for $42.9 and likely $43.4.
As the move up extends, support at $40.5 is expected to hold. Falling below this would imply that the corrective move down from $43.97 may be positioning itself to extend. Closing below $39.5 will confirm that a deeper test of support is underway and would clear the way for $38.1 and possibly $37.5 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.