Crude Oil Price Forecast – Crude oil markets get hammered

The crude oil markets broke down significantly during the trading session on Wednesday, as several central banks around the world cut rates overnight. Because of this, there are serious concerns about the possibility of global growth.
Christopher Lewis
Crude Oil daily chart, August 08, 2019

WTI Crude Oil

The WTI Crude Oil market broke down rather significantly during the trading session on Wednesday again, as we had the central banks from New Zealand, India, and Thailand cut rates. This has people worried about the potential of global growth, which seems to be all but dire at this point. Market participants obviously extrapolate that out to the idea of a serious lack of demand for crude oil and energy overall. With this, we have reached towards the $51 level, which is the beginning of support down to the $50 level. All things being equal, this is a market that if we were to break down below the $50 level, we would then collapse from there.

Crude Oil Price Forecast Video 08.08.19

Brent

Brent markets broke down below the $59 level, which I have marked as a “zone that extended to the $60 handle” during the previous session. With this, now that we have broken through that level it looks very likely that we continue to go much lower, perhaps down to the $55 level. If we can break down below that level, this market will fall down towards the $50 level next.

As central banks around the world cut interest rates, this tells you that there are lot of concerns out there, and I think at this point it’s almost impossible to believe that the demand for crude oil will pick up in that type of situation. All things being equal, I do believe that crude oil will go lower but we may get a short-term bounce. I more than willing to sell those rallies at previous support levels.

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