Crude oil

In my previous post on crude oil written on 26^th November 2017, I wrote, “Any breakout above 60 USD looks difficult, I think crude will consolidate between 50$ - 60$ before any further breakout which can push the prices to 70$ – 77$ level. I think the most likely reason for the breakout will be further deterioration in the geopolitical situation in major oil-producing countries.

If we look at the long-term chart of crude, I think the bear market in crude oil started in 2008 and we are already into 10 years of bear market. I don’t think we are going back to 100$ levels anytime soon but crude is very likely to consolidate and trade between 50$ to 77$ depending on the geopolitical situation. I continue to maintain an upward and positive bias on crude oil over next 2 years with short-term correction looking imminent.”

Crude oil did not correct as excepted but it broke above the resistance level and hit the upside target of 77 USD as mentioned in my post. Since then Crude has corrected by 20%.

If we look at the given chart of WTI crude, we can see that it has a strong support at 60 USD. Most likely we will see a 6% to 10% bounce from the current levels and it may move up to 65$, but I expect that to be short lived. I think the price will again fall from there to 55$ where it will test the long-term channel support. This can happen before the end of December 2018

Summary:-

·         Expect WTI to fall to 55 USD before the end of December.

·         There can be some intermediate bounce in the price to 65$

·         Crude should find support at 55 USD