Crude Oil Price Forecast – Crude Oil Markets Break Down Yet Again

WTI Crude Oil

The West Texas Intermediate Crude Oil market has gapped lower to kick off the week and broke down below the bottom of the hammer that formed on Friday. This is a very negative turn of events, but there is support underneath around the $50 level. That obviously will attract a certain amount attention, but I believe at this point the market is hell-bent on trying to break it. That doesn’t mean that I’m willing to sell and hang on right here, just that the relentless selling continues to be a major issue. As long as there are concerns about demand coming out of places like China, oil is going to be flat on its back. Furthermore, if the global economy is in fact slowing down anyway, that’s a double whammy.

Crude Oil Video 25.02.20

Brent

Brent markets also look horrible, as they are looking to break down below the $55 level again. Ultimately, the market looks likely to try to break to a fresh, new low, but the one thing I think you can count on is a lot of major volatility and headline risks out there. The coronavirus continues to cause mass chaos in China and now is threatening South Korea, which of course is also a major production facility for the world. With that in mind, it’s very unlikely that the market is going to be able to recover significantly without some type of major change in China and South Korea. The 50 day EMA above offers resistance, so if we were to break above the $60 level, then it’s very likely to continue going higher. Until then, I would be leery of any rallies.