Crude Oil Price Forecast – Crude Oil Markets Testing Major SupportCrude oil markets have gotten hammered during the Friday session as people continue to worry about demand coming out of China due to the coronavirus issue. At this point, the market is likely to test the $50 level in the WTI grade, and possibly even the $55 level in the Brent market.
The West Texas Intermediate Crude Oil market broke down significantly during the trading session on Friday, as we continue to see a lot of bearish pressure due to the concerns about lack of demand coming out of China. The coronavirus continues to shut down factories, and therefore production. Ultimately, the market looks very likely to test this area significantly, as there are a multitude of issues when it comes to demand. It’s not just China, it’s the fact that the global marketplace seems to be slowing down in general. Furthermore, the oversupply of oil continues to be a major issue. At this point, the $50 level looms large.
Brent markets have broken down significantly during the trading session as well, as you would expect. The $55 level underneath is a significant price level, and if we break down through that support level, it’s likely that the market will then go down to the $50 level. All things being equal, it does look like we are at an area where we should see some type of support, but if support does in fact give way, it’s very likely that the markets are going to break down rather significantly. That being said, the market was to turn around a break above the $58 level, then it could be a good sign that crude oil is going to hang on in this vicinity. All things being equal though, it’s probably best to step to the side right now.