WTI Crude Oil Forecast: Continues to Threaten to Break Down
The crude oil markets could get a little bit of a spike though because OPEC is threatening to cut production.
The West Texas Intermediate Crude Oil market has fallen again during the trading session on Thursday, as it looks like we are seeing a lot of jitters before the jobs number. The market breaking down below the $85 level is a very real threat right now, and if that were to happen, we would more likely than not see this market breakdown rather drastically.
At that point, I anticipate that the WTI market goes down to the $80 level. At that point, we are threatening a very significant breakdown and therefore we could see things fall apart. On the other hand, if we rally from here, we could go back to the 200-Day EMA. This is at roughly $95, but at this point, it seems like we are likely to see a lot of resistance, especially as we have so many different things going on at the same time in the world that could cause serious issues.
One of the biggest concerns of course is the fact that the Iranians could throw a million barrels into the market daily if they get the deal done with the West, and the increase in supply could be a big influence on the market.That could drive down prices quite rapidly, but furthermore, we have concerns about the global economy slowing down, as it looks like we are heading into a recession.In recessionary times, it’s very likely that demand for crude oil will continue to drop.
The crude oil markets could get a little bit of a spike though because OPEC is threatening to cut production. Whether or not that’s the case is a completely different situation, but I believe we have a situation where the market has shown its true colors, and therefore every rally will be looked at with suspicion. Signs of exhaustion will get sold into, and with the jobs number coming out on Friday, we will have to look at what the Fed may read into the employment situation. Ironically, the jobs number coming out stronger than anticipated may cause problems as it may have the Federal Reserve tightening monetary policy even further, therefore it could cause major problems for risk appetite and could slow down the economy even further. By the end of the day Friday, we should have more clarity.
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