See WTI Crude Oil Price Falling to $30 bbl or Lower

See WTI Crude Oil Price Falling to $30 bbl or Lower

See WTI Crude Oil Price Falling to $30 bbl or Lower

$USO, $OIL

Experts, including me are warning that Crude Oil prices might continue to decline, and could revisit Y 2016 lows and then some.

“Oil is in a downtrend and risks trending into the 30’s,” said a technical strategist at Bank of America Merrill Lynch, said in a note to clients early this week.

Using technical analysis, traders examine chart patterns to forecast changes in a security. Some traders do this alongside fundamental analysis, which, in Crude Oil’s case, would point to rising output from Libya and other Key producers when making the Bearish case.

WTI Crude Oil peaked this year near 54 bbl in February and has lost nearly 20% YTD, its worst performance for 1-H of the year since Y 1997.

The decline in Crude Oil prices has paused at the bottom of the downward sloping channel with support at 44.09 and resistance at 46.75 and 48.70.

WTI Crude Oil fell to 7-month lows last Wednesday, set for its largest price slide in 1-H of any year for the past 20, as investors discounted evidence of strong compliance by OPEC and non-OPEC producers with a deal to cut global output.

August Brent Crude futures were down 12c at 45.85 bbl by 0838 GMT, after falling nearly 2% in the prior session to their lowest settlement since last November.

WTI Crude Oil futures for August were down 7c at 43.44, marking their lowest since September Tuesday.

Compliance with an agreement by the Organization of the Petroleum Exporting Countries (OPEC) and other producers to cut output by 1.8-M BPD from January reached its highest in May since the curbs were agreed last year.

The slide in world Crude Oil prices looks to be unstoppable

The supply deal’s effectiveness increasingly questioned, we believe that downside risks to Oil prices from a (disorderly) and early unwinding have risen … we still see prices trading sideways, spending more time in the high 40’s than the low 50’s as growing shale output and stagnant western-world oil demand undermine the Middle East’s restriction efforts,” said a prominent Swiss bank analyst.

Data from the American Petroleum Institute (API) Tuesday showed US Crude Oil stockpiles last week had dropped more than forecast. Gasoline and distillate inventories rose.

A number of producers, notably Iraq, Saudi Arabia and Russia aggressively ramped up output, fast-tracking projects, expanding drilling programs and deploying spare capacity.

HeffX-LTN Analysis for USO: Overall Short Intermediate Long
Bearish (-0.44) Very Bearish (-0.62) Bearish (-0.35) Bearish (-0.35)
HeffX-LTN Analysis for OIL: Overall Short Intermediate Long
Bearish (-0.48) Very Bearish (-0.68) Bearish (-0.42) Bearish (-0.35)

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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