Crude Oil Forecast: Trump Tweet,OPEC Cuts, Global Growth Concer
Crude Oil Forecast: Trump Tweet, OPEC Cuts, Global Growth Concerns
What a week for Crude Traders!
We have published our previous forecast last Sunday. We were expecting a technical correction.
The week started with WTI oil prices tumbling more than 3% on Monday after President Trump publicly urged OPEC to lower crude oil prices.
“Oil prices getting too high. OPEC, please relax and take it easy. The world cannot take a price hike – fragile!” Trump said in an early morning tweet.
It was a good catalyst for our short trade setup, We have reached our targets.
Crude oil prices stabilized mid-week after Saudi Energy Minister Khalid al-Falih said OPEC is taking a measured approach to supply cuts.
“We are taking it easy,” he told CNBC when asked about the U.S. president’s tweet.
“We remain flexible, I am leading toward the likelihood of an extension in the second half (of 2019), but that’s not automatic,” al-Falih said. “If we find out the fundamentals are tightening, by June you can bet that I will be, just like we did last year, encouraging my colleagues within the OPEC plus to ease the voluntary limits we set on ourselves and to increase supplies to ensure that there is no unnecessary tightening in the market.”
“The current levels are not God-given, this is just the best compromise we could reach back in December,” al-Falih added, discussing the OPEC plus deal. “So if in June we find out we need to have a different limit, a different target from 1.2 million barrels, certainly it is open. But the easiest way forward, assuming it is still an oversupply, would be to roll over.”
Then Crude prices settled sharply lower on Friday, as declines in the U.S. ISM manufacturing index, which came on the heels of underwhelming Chinese factory activity, fed worries over a potential slowdown in energy demand.
The U.S. and China are the world’s two largest oil-consuming nations and manufacturing numbers are used as indicators for fuel demand growth.
Prices were also dragged down by surging U.S. crude oil production, which has risen by more than 2 million barrels per day (bpd) over the last year, to an unprecedented 12.1 million bpd.
Crude traders will stay focusing on global crude supplies and the outlook for energy demand in the week ahead after disappointing manufacturing data from the U.S. and China stoked concerns over demand growth.
Our medium-term forecast and view have not changed. - see attached-
Still, oil markets remain relatively well supported by supply cuts by OPEC.
Looking at the matter technically; I would like to go over my previous chart which worked well so far.
Crude Oil prices retested the 57.87 and pulled back by the reasons explained above.
Bearish Scenario: Double Top would be completed at the breakdown of $ 55 support. Targets will be 54.69, 53.91, 53.13.The ultimate target of the formation is $ 52 – meeting Fibonacci 88.6% of the latest bullish move –
As we have mentioned several times before, we do not see any fundamental reason to keep the prices below $52-$ 50 levels. Potential pullbacks towards $ 52 can be used as buying opportunities.
If the Bears fail to break below 55 and prices makes a few H4 closing above $ 55, fresh long positions can be added targeting 57.87 and 59.30.
Any intraday opportunities will be published for the members.
Good Luck
What a week for Crude Traders!
We have published our previous forecast last Sunday. We were expecting a technical correction.
The week started with WTI oil prices tumbling more than 3% on Monday after President Trump publicly urged OPEC to lower crude oil prices.
“Oil prices getting too high. OPEC, please relax and take it easy. The world cannot take a price hike – fragile!” Trump said in an early morning tweet.
It was a good catalyst for our short trade setup, We have reached our targets.
Crude oil prices stabilized mid-week after Saudi Energy Minister Khalid al-Falih said OPEC is taking a measured approach to supply cuts.
“We are taking it easy,” he told CNBC when asked about the U.S. president’s tweet.
“We remain flexible, I am leading toward the likelihood of an extension in the second half (of 2019), but that’s not automatic,” al-Falih said. “If we find out the fundamentals are tightening, by June you can bet that I will be, just like we did last year, encouraging my colleagues within the OPEC plus to ease the voluntary limits we set on ourselves and to increase supplies to ensure that there is no unnecessary tightening in the market.”
“The current levels are not God-given, this is just the best compromise we could reach back in December,” al-Falih added, discussing the OPEC plus deal. “So if in June we find out we need to have a different limit, a different target from 1.2 million barrels, certainly it is open. But the easiest way forward, assuming it is still an oversupply, would be to roll over.”
Then Crude prices settled sharply lower on Friday, as declines in the U.S. ISM manufacturing index, which came on the heels of underwhelming Chinese factory activity, fed worries over a potential slowdown in energy demand.
The U.S. and China are the world’s two largest oil-consuming nations and manufacturing numbers are used as indicators for fuel demand growth.
Prices were also dragged down by surging U.S. crude oil production, which has risen by more than 2 million barrels per day (bpd) over the last year, to an unprecedented 12.1 million bpd.
Crude traders will stay focusing on global crude supplies and the outlook for energy demand in the week ahead after disappointing manufacturing data from the U.S. and China stoked concerns over demand growth.
Our medium-term forecast and view have not changed. - see attached-
Still, oil markets remain relatively well supported by supply cuts by OPEC.
Looking at the matter technically; I would like to go over my previous chart which worked well so far.
Crude Oil prices retested the 57.87 and pulled back by the reasons explained above.
Bearish Scenario: Double Top would be completed at the breakdown of $ 55 support. Targets will be 54.69, 53.91, 53.13.The ultimate target of the formation is $ 52 – meeting Fibonacci 88.6% of the latest bullish move –
As we have mentioned several times before, we do not see any fundamental reason to keep the prices below $52-$ 50 levels. Potential pullbacks towards $ 52 can be used as buying opportunities.
If the Bears fail to break below 55 and prices makes a few H4 closing above $ 55, fresh long positions can be added targeting 57.87 and 59.30.
Any intraday opportunities will be published for the members.
Good Luck
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