WTI Crude Oil Forecast: Looks Vulnerable To Selling Pressure
(MENAFN- Daily Forex)
- The West Texas Intermediate crude Oil market has initially tried to rally on Friday, as everything went“risk on” for a short amount of time.
- The cooler than anticipated jobs number had people thinking that perhaps the federal Reserve would have to slow down its monetary tightening.
- People started to second-guess this, and it does start to suggest that we have a situation where the Federal Reserve is going to have to induce a recession, then of course has its effect on the oil market.
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Keep in mind that one of the biggest killers of oil will be a lack of demand, and as a result it looks like the sellers are still fighting right along. I do think that it is probably only a matter of time before we would see less crude oil being used. Furthermore, this is a global phenomenon, not just a US phenomenon.Choppy Negativity Ahead
There is the possibility that the Iranians would be able to produce more crude oil for the rest of the world, and that of course has its own effect on the market. After all, the market having more supply when there's less demand only puts on more pressure to the market. On the other hand, there's also the possibility that OPEC may cut production, and of course we have the meeting coming next week that could cause quite a bit of volatility . Nonetheless, what I find interesting is the fact that we ended up having formed an inverted hammer. If we break down below that, then it's likely we will try to get to the $85 level, possibly the $82.50 level.
On the other hand, if we can break above the top of the inverted hammer, that's a very bullish sign and could have the possibility of opening a move toward the $92 level, roughly where the 50 and the 200 Day EMA indicators currently sit. Regardless, I think the easiest way to trade this market is to look for signs of exhaustion and start shorting again. If we break above the moving averages, it could show a shift and the overall attitude, but I don't think that happens without the OPEC meeting shaking the markets up quite drastically. In general, I think we continue to see pork chop with negativity than anything else.
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