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Oil Price Fundamental Daily Forecast – WTI Strengthens Over $68.78, Weakens Under $68.28

By:
James Hyerczyk
Published: Sep 14, 2018, 08:24 UTC

This week’s price action suggests there is a bias to the upside, but traders are a little tentative about buying strength or breakouts. They seem to like buying on dips. Prices were supported early in the week on worries over the looming sanctions against Iran, and their impact on supply. Prices were pressured by concerns over emerging market crises and trade disputes, and their effects on demand.

Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging higher on low volume early Friday. Traders appear to be taking a breather after a mostly volatile week. The two-sided trade this week has been fueled by traders trying to find the delicate balance between concerns about oil supply and worries about lower future demand.

At 0954 GMT, November WTI crude oil futures are trading $68.84, up $0.43 or +0.64%, and December Brent crude oil is at $78.07, up $0.32 or +0.41%.

Prices were supported early in the week on worries over the looming sanctions against Iran, and their impact on supply. Prices were pressured by concerns over emerging market crises and trade disputes, and their effects on demand.

This notion was backed this week when the International Energy Agency warned that although the oil market was tightening at the moment and world oil demand would reach 100 million barrels per day (bpd) in the next three months, global economic risks were mounting.

“As we move into 2019, a possible risk to our forecast lies in some key emerging economies, partly due to currency depreciations versus the U.S. Dollar, raising the cost of imported energy,” the IEA said.

“In addition, there is a risk to growth from an escalation of trade disputes,” the Paris-based agency said.

Despite these concerns, supply worries are being supported by data showing that U.S. crude production fell by 100,000 bpd to 10.9 million barrels per day the week-ending September 7 as the industry faces pipeline capacity constraints.

Forecast

This week’s price action suggests there is a bias to the upside, but traders are a little tentative about buying strength or breakouts. They seem to like buying on dips.

For the Brent contract, support is at $77.86 to $77.39 today. A sustained move over $77.86 will indicate the presence of buyers. If this move can generate enough upside momentum then buyers may take a run at $79.61.

A sustained break under $77.39 will signal the presence of sellers. The charts indicate the market is vulnerable to $73.38 and $75.11.

WTI Crude Oil is currently testing its key zone at $68.78 to $68.28. A sustained move over $68.78 will indicate the presence of buyers. The daily chart has room to run to $70.89 to $70.98.

A sustained move under $68.28 will signal that the selling is getting stronger. The next main target zone is $67.34 to $66.47.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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