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Crude Oil Weekly Price Forecast – Crude Oil Markets Continue to Fall

Crude oil markets rallied a bit during the week but rolled over again as OPEC can do very little to stem the selloff. There had been talk about OPEC cutting back 1 million barrels per day while the others such as Russia could cut back 500,000 per day, but that has fallen apart.
Christopher Lewis

WTI Crude Oil

The WTI Crude Oil market has initially tried to rally during the week but has found enough resistance just below the $50.00 level. That is a large, round, psychologically significant figure and also the previous support level that had gotten broken down below. We ended up forming a bit of an inverted hammer for the week, which of course is a very negative sign. If the market was to break down below the $40 level, we could collapse at that point. Quite frankly it is starting to look more likely than not due to the fact that Russia has scoffed at the idea of production cuts.

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WTI Oil Video 09.03.20

Brent

Brent markets also look very anemic, initially trying to rally for the week but finding enough resistance at the $55 level to turn around and form an inverted hammer. That of course is a negative sign and it looks as if Brent will go looking below the $45 level. If we can break down below that level, then it’s very likely that the markets go much lower. Ultimately, if the market was to rally at this point, I would be very suspicious without some type of production cut that is meaningful. Quite frankly, OPEC is at the mercy of the rest of the world and the lack of demand. At this point, it’s very likely that we will continue to see selling pressure every time it rallies, as this simply cannot pick itself up.

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