Crude Oil Price Forecast – Crude Oil Markets Break Down a Bit

WTI Crude Oil

The West Texas Intermediate Crude Oil market broke down rather significantly during the trading session on Thursday, reaching down towards the $38 level again. This is an area that has been supportive in the past so as things stand right now one would have to assume that there will be a bit of a bounce. Regardless, this is a market that I think will favor the downside in general, mainly because there is no demand for crude oil which is something that a lot of traders seem to be looking past. Sooner or later, supply and demand does enter the picture, and reasserts its importance.

Crude Oil Video 02.10.20

Brent

Brent markets obviously did the same thing during the trading session on Thursday, reaching down towards the $40 level. Obviously, the $40 level is psychologically important and will attract a lot of attention. With that being said, I do believe that this is a market that will eventually break down below the $40 level, unwinding the entire crude oil trade. In fact, I fully anticipate that Brent is where we will see the move start. In the short term, I still look to fade rallies that show signs of exhaustion but quite frankly I do not think that we are going to see a pickup in demand, so sooner or later this market will have to face that fact as well. Given enough time, I like the idea of fading rallies at the 50 day EMA, and perhaps Amy towards the $37.50 level underneath.

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