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Crude Oil Price Forecast – Crude Oil Markets Gap Higher

By:
Christopher Lewis
Published: Jun 5, 2023, 14:40 GMT+00:00

Crude oil markets gapped higher to kick off the week after OPEC extends production cuts, and doubles down on trying to push prices higher.

Crude oil, FX Empire

In this article:

Crude Oil Prices Forecast Video for 06.06.23

WTI Crude Oil Technical Analysis

The West Texas Intermediate Crude Oil market gapped to the upside on Monday, as OPEC decided to cut over 1 million barrels more per day to try and elevate pricing. At this point, it’s obvious that there are major concerns about the next leg of the global economy, as oil demand will almost certainly fall off of a cliff. If that’s going to be the case, it’ll be interesting to see how this all plays out, because we have filled the gap, so now it will be up to the buyers to see if they can come back into the picture and make things happen. At this point, it’ll be interesting to see how this plays out but I certainly think we have a scenario where traders will have to be somewhat cautious.

If we were to turn around and take out the top of the Monday candlestick, then it opens up the possibility of a move to the 200-Day EMA. Underneath, the $70 level could be a major support level, we will just have to wait and see how that plays out.

Brent Crude Oil Technical Analysis

Brent markets also have gapped to the upside, testing the 50-Day EMA before pulling back. By doing so, it suggests that this market is going to continue to struggle to go higher, despite the fact that OPEC is doing everything he can to support it. Because of this, I would anticipate a lot of volatility but I am going to have to point out the fact that this reaction has been somewhat muted, so we will have to wait and see if there’s any follow-through. On a break above the top of the candlestick for the day, that would obviously be very bullish and I suspect that oil would go much higher, testing the $80 level initially. On the other hand, if we do fall from here, that would be a very bad looking candle, so we can see Brent testing the bottom of the range that we have been in recently, which would be nothing short of horrific for pricing power. If OPEC cutting another million barrels per day can’t do it, I’m not exactly sure what can as far as the buyers are concerned.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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