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Crude Oil Price Forecast – Crude oil markets fall again

Crude oil markets fell again during trading on Tuesday, as we continue to see a lot of concern about the US/China trade relations situation. Beyond that though, there just seems to be general chaos in the markets overall.
Christopher Lewis
Crude Oil daily chart, May 08, 2019

WTI Crude Oil

The WTI Crude Oil market broke down a bit during the trading session on Tuesday, reaching towards the 50 day EMA yet again. This has been a bit brutal during the trading session but ultimately we are still sitting just above major support levels, so it’s very likely that the buyers will try to continue to support the market. Because of this, it’s very likely that a “buy on the dips” mentality should return as participants continue to see value at lower levels. If we were to break down below the $59 level though, that could open the door to significant losses. At that point you would have to think $55 would be the next stop.

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Brent

Brent looks very much the same as you would expect, following the trend line that I have on the chart. The $70 level looks to be supportive, so at this point there’s no reason to be concerned but it’s obvious that the markets are volatile to say the least. The 200 day EMA which is pictured in blue on the chart is your support. If we were to break down below that area, extensively the $60 handle, then the market could unwind down to the $65 level.

On the other side of the equation, we could rally again and go looking towards the $72.50 level, which is more likely than not based upon the previous action. However, we do have to keep in mind that a break down could come. If it does, this could be brutal and fast. It will happen in both markets simultaneously.

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