Crude Oil Forecast – WTI Eyes $93 Bull Flag Target as Brent Threatens $90 Barrier

WTI Crude Oil

The light sweet crude oil market initially pulled back a bit after gapping higher on Monday, but then we had the Iranian military talking about destroying anything that is aggressive and that the idea of a memorandum of understanding would come with tight controls, and there you go, gold starts to rally.

Ultimately, this is a never-ending drama and we, I think, are starting to come to grips with the idea that the conflict in the Persian Gulf is nowhere near being finalized. The Iranians will more likely than not continue to keep the strait closed or heavily restricted, and that will greatly influence the flow of crude oil. This is a situation that I think is murky to say the least.

Ultimately, it looks as if a bullish flag is forming in the oil markets. We’ll see. A measured move would lead to the next swing high, somewhere around $93 if it were to break out to that upside. But again, as I’ve been saying, this is driven by the latest headlines. It’s not really driven by anything else, and unfortunately, they can come out whenever.

Brent

The Brent market has rallied as well as you would expect. It is currently threatening the $90 level. If it clears that, it is a psychological hurdle worth paying attention to. It could in theory open up a much bigger move.

We are sitting just above the 50-day EMA and the $85 level, so both of those are worth watching as potential support. But again, unfortunately, this is about a handful of old men in a couple of cities trading barbs over social media and through the media in large, and that’s essentially what’s driving the oil markets, making it a very difficult place to live.