WTI Crude Oil Short-Term Price Forecast

The outlook for WTI crude oil continues to lean negative. WTI settled below the 200-day moving average for the fourth straight day after another early test of resistance. This has formed long upper shadows on the daily candlesticks for the last three days, all of which form shooting star. Granted, shooting stars within a range-bound market are not as reliable as those that form after a long uptrend, but they still reflect near-term weakness.

Nevertheless, WTI settled back above the 20-day moving average today and is still trading in the upper half of the Bollinger Bands, which are squeezing again. There is also a bullish coil that formed on the intra-day charts for the past few days.

The near-term call remains a challenge, but odds still favor an eventual break lower. Closing below $42.3 will clear the way for the key objective at $41.5. This is a highly confluent wave projection and the 50-day moving average. Settling below $41.5 will confirm a break lower out of the Bollinger Bands and clear the way for a much deeper correction before the move up eventually continues.

Conversely, prices have risen a bit after today’s settle, so there is a good chance for a test of $43.3 first. This is the smaller than (0.618) target of the wave up from $42.56 and connects to $43.8. This level is expected to hold. Key resistance and the barrier for a near-term bullish outlook is $44.2. Settling above $44.2 would be a strong indication that a much larger move up is underway.

Brent Crude Oil Short-Term Price Forecast

Brent crude oil settled back above the 20-day moving average today, but the waves down from $46.54 continue to call for a deeper test of support. Falling below $45.0 will open the way for at least $44.2. This is in line with the 50-day moving average and the $44.17 swing low. Settling below $44.2 would strongly indicate that a much larger correction is beginning to unfold.

Trading will likely remain choppy for the near-term though. Resistance at $46.2 is expected to hold and $46.7 is key. Settling above $46.7, which is near the 200-day moving average and the 50 percent retracement of the decline from $66.15, would imply that prices have finally broken higher out of the upward sloping range. This would be quite bullish for the long-term outlook.

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.

WTI Crude Oil Short-Term Price Forecast

WTI crude oil rose toward the upper end of the range it has been trading in for the past several weeks. The crucial $43.4 target discussed in this week’s Commentary and yesterday’s update was challenged. This level held on a closing basis. However, WTI’s $43.35 settle was four ticks above the 200-day moving average. Therefore, the outlook leans positive headed into tomorrow.

There is immediate resistance near the $43.68 swing high, but the waves up from $39.0 and $41.33 now call for a test of $44.2. Settling above this will call for $44.6 and then $46.0.

That said, caution is warranted. The move up has been supported by the rise in product prices for the past few days, most specifically by gasoline. Gasoline had the least negative outlook coming into the week and has likely been driven higher because of supply fears caused by hurricane Laura. Even so, gasoline pulled back this afternoon and formed a long-upper shadow. This suggests its move up might be short-lived. Should gasoline continue to fall tomorrow, WTI will be hard-pressed to overcome $44.2. Therefore, gasoline, and to a smaller degree, diesel, will probably determine the direction of WTI during the next few days.

For WTI, falling below $42.7 will imply that a test of $42.2 support is underway. The $42.2 level is near the 62 percent retracement of the rise from $41.33, the smaller than (0.618) target of the wave down from $43.68, and the 20-day moving average. Closing below this would call for key support at $41.2. This is the equal to (1.00) target and 50-day moving average. Settling below $41.2 would clear the way for a much larger test of support before the move up continues.

Brent Crude Oil Short-Term Price Forecast

Brent rose to the top of its trading range and settled above the $45.6 level discussed in yesterday’s update. The move up is now in a position to break higher out of the range and reach $46.4. This is the smaller than (0.618) target of the primary wave up from $41.72 and is marginally below the 200-day moving average. Settling above $46.4 will clear the way for $46.9 and higher.

Nevertheless, as discussed for WTI, the degree to which Brent rises during the next few days (and possibly longer) will largely be determined by gasoline and diesel prices. Should they continue to fall, Brent’s move up will be short-lived.

For now, initial support at $45.1 will likely hold. Falling below this will call for $44.4, which then connects to key support at $43.5. Settling below $43.5 will clear the way for a much more significant downward correction before Brent’s 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.

WTI Crude Oil Short-Term Price Forecast

WTI crude oil continues to trade in a choppy range that is bound within the upper half of the Bollinger Bands. A Bollinger squeeze trade setup in place, and because prices are trading above the 20-day moving average there is a good chance for a break higher out of the seven week-long upward sloping trading range. However, many bearish technical factors continue to call for a break lower out of the range and for a deeper correction before the move up ultimately continues.

In addition, today’s wave structure suggests that WTI will fall to challenge at least $42.3 early tomorrow. This is the equal to (1.00) target of the wave down from $43.29 and the 50 percent retracement of the rise from $41.33. Taking out $42.3 will call for a test of key near-term support at $41.8. This is the larger than target (1.618) of the wave down from $43.29, the smaller than (0.618) target of the wave down from $43.68, and is in line with the 20-day moving average.

Based on recent trading patterns, settling below $41.8 may be a challenge, but this would clear the way for a test of $40.6. This is near the equal to target of the wave down from $43.68, the 50-day moving average, and the lower Bollinger band. Settling below $40.6 would confirm a break lower out of the trading range and clear the way for a much more significant test of support before the move up continues.

Nevertheless, should $42.3 hold early tomorrow there is still a good chance for a test of crucial resistance at $43.5. This is just above the upper Bollinger band and is in line with the 200-day moving average. Settling above $43.5 would call for $44.2, which then connects to $44.7 and $46.1.

Brent Crude Oil Short-Term Price Forecast

Brent crude oil is trading in the upper half of the Bollinger Bands, so there is still a good chance for a break higher out of the recent trading range. However, the wave formation for the past few days call for a test of $44.4 first. This is an important wave projection and retracement that is also in line with the 20-day moving average. Settling below $44.4 will call for a test of $43.8 and possibly $43.1. The $43.1 target is in line with the bottom Bollinger band and the 50-day moving average. Closing below this would call for a much more significant test of support before the move up ultimately continues.

Conversely, should $44.4 hold, look for a test of $45.7. This is near the upper Bollinger band. Settling above $45.7 would confirm a break higher and call for $46.4 and then $46.9. The latter level is in line with the 200-day moving average and is the barrier for a much more bullish outlook in the coming weeks.

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

WTI Short-Term Price Forecast

The near-term outlook for WTI crude oil leans bearish. Today’s initial move up stalled at the 78 percent retracement of the decline from $43.52. The subsequent move down formed another long upper shadow on the daily candlestick chart. The body of today’s candlestick is too big to be a shooting star, but the price action is still bearish. Also, WTI took out the 62 percent retracement of the rise from $41.06. These factors, weekly reversal pattern setups, recently confirmed daily bearish momentum divergences, and the wave formation down from $43.52 call for a deeper test of support.

The primary wave down from $43.52 is poised to meet its $41.42 smaller than (0.618) target. This is bearish for the near-term outlook because most waves that meet the smaller than target extend to the equal to (1.00) target, in this case, $40.5. The $40.5 level is crucial because this is the 62 percent retracement of the rise from $38.72. Settling below this will call for a move below $40.0 and the 50-day moving average to challenge $39.5 and possibly $39.0, the intermediate (1.382) and larger than (1.618) targets, respectively. The $39.0 objective is a likely stalling point because this is also the 21 percent retracement of the move up from $21.99.

Nevertheless, the 21-day moving average around $41.3 has been strong support for the past few days. Therefore, because this is near the $41.42 smaller than target of the wave down from $43.52 a test of resistance will probably take place first. Resistance at $42.5 is expected to hold and $43.4 is key. Settling above $43.4 will call for WTI to challenge $43.9. This is a highly confluent wave projection that is also in line with the 200-day moving average. Because of this, a deeper test of support is expected before overcoming $43.9.

Brent Short-Term Price Forecast

Brent crude oil stalled at $45.79 today and the subsequent move down took out the smaller than (0.618) target of the primary wave down from $46.23. Therefore, Brent is poised to reach $43.9 tomorrow. This is the equal to (1.00) target, the 50 percent retracement of the rise from $41.72, and is in line with the 21-day moving average. The $43.9 target may prove to be a stalling point, but a close below this will clear the way for $43.3 and possibly $42.7 during the next couple of days.

Odds for a test of resistance will rise once $43.9 is met. However, resistance around $45.3 is expected to hold. Overcoming $45.3 will call for a test of key resistance at $45.9. This then connects to $46.5 and $47.1.

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