Crude Oil Price Forecast – Crude Oil Markets Test Support Again

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The West Texas Intermediate Crude Oil market has pulled back during the trading session on Thursday again, reaching below the $52.50 level. There is significant support all the way down to the $50.00 level. With that, I think it’s difficult to imagine that this market is simply going to slice through there and there is a likelihood of value hunting going on in that area. We have crashed in this area and people are trying to tie this to the potential slowdown with the coronavirus ripping through China. That being the case, the market is relatively cheap in this area, so a bounce is still possible, at least from the short term.

Brent
Brent markets also have pulled back towards the $57.50 level, which is the beginning of support all the way down to the $55 level. There is a significant amount of support in this area, as it looks like we could bounce from there. At this point, the market bouncing makes quite a bit of sense that a bounce then occurs, and it goes looking towards the $60 handle above. All things being equal, this is a market that I think will continue to a lot of noisy action, as again, people will blame this on the coronavirus slowing down economic movement in China, which by extension could slow down consumption of crude oil. That being said though, this is a short-term phenomenon more than anything else. We are at the bottom of the larger consolidation area so clearly there are people looking to buy in this region.