Crude Oil Price Forecast – Crude Oil Markets Look Vulnerable

The WTI Crude Oil

The West Texas Intermediate Crude Oil market dropped below the $37.50 level during the trading session on Friday after the jobs number disappointed. That being said, there are a lot of concerns out there when it comes to the economy anyway, and of course there are multiple countries out there looking to break the production cut agreement. There is also fear that fiscal stimulus is not coming into Wall Street’s hands, so they are looking to throw a tantrum and sell risk assets. All things being equal, the US dollar looks likely to continue strengthening and that works against oil as well. WTI is likely to break through the $37.50 level, perhaps reaching down to the $35 level.

Crude Oil Video 05.10.20

Brent

Brent markets also fell during the trading session, breaking through the $40 level. I believe that the Brent market will continue to lead the way, as it is much more sensitive to those production cut losses, and therefore I think as it breaks down the WTI will try to play catch up. The strengthening US dollar course works against this market as well and given enough time we will probably go down to the $35 level. Rallies at this point are to be sold in both of these markets, and I feel and see that it is only a matter of time before we continue to see selling pressure into this market as traders around the world are starting to come to grips with the idea that the global economy is far from being healed, which of course will drive down demand for crude oil.

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