Crude Oil Weekly Price Forecast – crude oil markets form potential bottom

Crude oil markets fell during the week but are closing out the week in a positive tone, forming a bit of a hammer. I think at this point, we may be getting very close to a bottom in this market, and quite frankly that’s not a huge surprise considering how hard we have fallen.
Christopher Lewis
Crude Oil weekly chart, December 31, 2018

WTI Crude Oil

The WTI Crude Oil market bounced around during the week but ended up forming a massive hammer. It’s possible that we could be forming a bit of a bottom, and after the massive selloff that we have seen, it makes sense that we will in fact find buyers. I think the $50 level above is massive resistance, but if we can clear that area, and then the $55 level, I suspect that oil will continue to grind towards $65. If we break down below the bottom of the weekly candle stick, then we probably go down to the $40 handle. Ultimately, this is a market that is trying to find its way.

WTI Video 31.12.18

Brent

Brent markets also have fallen very hard, reaching down towards the $50 level. Ultimately, this is a market that looks as if it is trying to form a bottom at that psychologically important figure, and I believe it’s only a matter of time before OPEC gets involved, and perhaps even see outright buying by certain sovereign wealth funds in the Persian Gulf. I think we are looking at the bottom for the year, and I believe that a lot of funds are about to jump back into the oil game due to a “reversion to the mean” type of trade that seems to be setting up. If we did break down below the $50 handle, this is a market that could reach $45 rather quickly.

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