Crude Oil Price Forecast – Crude Oil Continues to Chop Back and Forth

WTI Crude Oil

The West Texas Intermediate Crude Oil market has fallen again during the trading session on Thursday to test the bottom of the Tuesday and Wednesday sessions. By doing so, this does not look good, and it suggests that we may have a little bit more negativity ahead of us. Short-term rallies will probably be sold into, but if we were to break above the high from the Monday candlestick, then I might be convinced about a rally.

I think that the Thursday trading session was simply a correction of the ridiculous behavior on Wednesday when we wiped out all of the losses from the previous session based upon the premise of the Suez Canal being blocked. The demand for crude oil continues to fall, so even if 10% of the world’s oil is off-line for a few days, the reality is that there are much longer term structural issues. Ultimately, a strengthening US dollar works against the value of crude oil, and of course commodities in general.

Crude Oil Video 26.03.21

Brent

As euro zone countries continue to suffer with the overall coronavirus pandemic, the demand for crude oil becomes a serious concern in general. Furthermore, as prices climbed, shale suddenly becomes much more profitable, and a flood of oil should be hitting the market relatively soon. This has been a major influence on the Brent market, because more competition will come into play.

This is not to say that the crude oil market is going to completely collapse, but rather we had gotten far too ahead of ourselves in this recent rally, and quite frankly at this point we have to think about exactly who is left to buy crude oil at high prices? The OVX, which is the oil volatility index, has broken above recent highs, suggesting that there are going to continue to be serious concern when it comes to the pricing of the market.

It certainly looks as if oil is likely to continue falling.

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