Crude Oil Price Forecast – August 18, 2020

Author: Dean Rogers, CMT

Dean Rogers, CMT is the general manager of the Kase Call Center in Albuquerque, New Mexico. He oversees all of Kase and Company, Inc.’s operations including research and development, marketing, and client support. Dean began his career with Kase in early 2001 as a programmer but has developed into Kase’s senior technical analyst. He writes Kase’s award-winning weekly Crude Oil, Natural Gas, and Metals Commentaries. He is an instructor at Kase's classes and webinars and provides all of the necessary training and support for Kase's hedging models and trading indicators for both retail and institutional traders.

WTI Crude Oil Short-Term Price Forecast

WTI crude oil continues to trade in a choppy range that is bound within the upper half of the Bollinger Bands. A Bollinger squeeze trade setup in place, and because prices are trading above the 20-day moving average there is a good chance for a break higher out of the seven week-long upward sloping trading range. However, many bearish technical factors continue to call for a break lower out of the range and for a deeper correction before the move up ultimately continues.

In addition, today’s wave structure suggests that WTI will fall to challenge at least $42.3 early tomorrow. This is the equal to (1.00) target of the wave down from $43.29 and the 50 percent retracement of the rise from $41.33. Taking out $42.3 will call for a test of key near-term support at $41.8. This is the larger than target (1.618) of the wave down from $43.29, the smaller than (0.618) target of the wave down from $43.68, and is in line with the 20-day moving average.

WTI Crude Oil – $0.35 Kase Bar Chart

Based on recent trading patterns, settling below $41.8 may be a challenge, but this would clear the way for a test of $40.6. This is near the equal to target of the wave down from $43.68, the 50-day moving average, and the lower Bollinger band. Settling below $40.6 would confirm a break lower out of the trading range and clear the way for a much more significant test of support before the move up continues.

Nevertheless, should $42.3 hold early tomorrow there is still a good chance for a test of crucial resistance at $43.5. This is just above the upper Bollinger band and is in line with the 200-day moving average. Settling above $43.5 would call for $44.2, which then connects to $44.7 and $46.1.

Brent Crude Oil Short-Term Price Forecast

Brent crude oil is trading in the upper half of the Bollinger Bands, so there is still a good chance for a break higher out of the recent trading range. However, the wave formation for the past few days call for a test of $44.4 first. This is an important wave projection and retracement that is also in line with the 20-day moving average. Settling below $44.4 will call for a test of $43.8 and possibly $43.1. The $43.1 target is in line with the bottom Bollinger band and the 50-day moving average. Closing below this would call for a much more significant test of support before the move up ultimately continues.

Conversely, should $44.4 hold, look for a test of $45.7. This is near the upper Bollinger band. Settling above $45.7 would confirm a break higher and call for $46.4 and then $46.9. The latter level is in line with the 200-day moving average and is the barrier for a much more bullish outlook in the coming weeks.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial

Gold Near-Term Outlook

Gold was due for a significant test of support, the beginning of which took place on Tuesday. The move down from $2089.2 retraced just over 50 percent of the move up from $1690.1. While this aggressive move down was bearish for the near-term outlook, the move up during the past two days implies that the decline will probably prove to be corrective of the larger scale move up.

It is too soon to call for the correction to be complete. However, based on today’s move up to fulfill the $2073 smaller than (0.618) target of the primary wave up from $1874.2, a larger test of resistance is expected tomorrow. Rising above $1973 will clear the way for $1991 and likely $2007. The $2007 objective is the equal to (1.00) target of the wave up from $1874.2 and the 62 percent retracement of the decline from $2089.2. Settling above $2007 would signal that the correction might already be complete and would clear the way for $2020, $2040, and $2065 early next week.

Gold – $10 Kase Bar Chart

Nevertheless, given the number of reversal signals that were confirmed on the daily and likely the weekly chart tomorrow, there is a good chance that $2007 will hold, at least initially.

Conversely, should $2073 continue to hold and upon an early move below $1936 tomorrow, look for a test of key near-term support at $1913. Settling the week below $1913 will call for prices to fall toward $1885 and ultimately major support at $1845 early next week.

This is a brief analysis for the next day or so. Our weekly Metals Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key COMEX precious metals futures contracts and LME Non-Ferrous (Base) metals, spot gold, the gold/silver ration, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Near-Term Outlook

The overall outlook for natural gas is bullish because the move up from $1.583 looks to be forming a five-wave trend. Wave I fulfilled its $2.30 larger than (1.618) target when prices rose to $2.284. This was likely the top of Wave III and the subsequent move down is forming Wave IV. Today’s pseudo hammer suggests the corrective Wave IV may be complete, or at least that it is nearing completion.

Tomorrow, look for a test of $2.21. This is the 62 percent retracement of the decline from $2.284. A close above this would strongly imply that the corrective Wave IV is complete and would call for $2.30 to be challenged again. Settling above $2.30 will confirm that Wave V is underway.

Conversely, based on the wave formation down from $2.284, there is still a reasonable chance for Wave IV to extend to $2.03 before Wave V forms. Should natural gas fall below $2.09 early tomorrow, or hold $2.21 and then take out $2.13, look for the corrective move down to reach $2.03. Support at $2.03 is expected to hold because this is the larger than target of the primary wave down from $2.284 and the 38 percent retracement of the rise from $1.583.

Settling below $2.03 is unlikely. This would imply that the move up is not a five-wave trend but rather a nested three-wave pattern. While this would still be bullish for the long-term, it would delay the likelihood of natural gas rising above $2.30 for at least another next few weeks.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

WTI Short-Term Price Forecast

The near-term outlook for WTI crude oil leans bearish. Today’s initial move up stalled at the 78 percent retracement of the decline from $43.52. The subsequent move down formed another long upper shadow on the daily candlestick chart. The body of today’s candlestick is too big to be a shooting star, but the price action is still bearish. Also, WTI took out the 62 percent retracement of the rise from $41.06. These factors, weekly reversal pattern setups, recently confirmed daily bearish momentum divergences, and the wave formation down from $43.52 call for a deeper test of support.

The primary wave down from $43.52 is poised to meet its $41.42 smaller than (0.618) target. This is bearish for the near-term outlook because most waves that meet the smaller than target extend to the equal to (1.00) target, in this case, $40.5. The $40.5 level is crucial because this is the 62 percent retracement of the rise from $38.72. Settling below this will call for a move below $40.0 and the 50-day moving average to challenge $39.5 and possibly $39.0, the intermediate (1.382) and larger than (1.618) targets, respectively. The $39.0 objective is a likely stalling point because this is also the 21 percent retracement of the move up from $21.99.

WTI Crude Oil – $0.35 Kase Bar Chart with KEES and KaseTrend

Nevertheless, the 21-day moving average around $41.3 has been strong support for the past few days. Therefore, because this is near the $41.42 smaller than target of the wave down from $43.52 a test of resistance will probably take place first. Resistance at $42.5 is expected to hold and $43.4 is key. Settling above $43.4 will call for WTI to challenge $43.9. This is a highly confluent wave projection that is also in line with the 200-day moving average. Because of this, a deeper test of support is expected before overcoming $43.9.

Brent Short-Term Price Forecast

Brent crude oil stalled at $45.79 today and the subsequent move down took out the smaller than (0.618) target of the primary wave down from $46.23. Therefore, Brent is poised to reach $43.9 tomorrow. This is the equal to (1.00) target, the 50 percent retracement of the rise from $41.72, and is in line with the 21-day moving average. The $43.9 target may prove to be a stalling point, but a close below this will clear the way for $43.3 and possibly $42.7 during the next couple of days.

Odds for a test of resistance will rise once $43.9 is met. However, resistance around $45.3 is expected to hold. Overcoming $45.3 will call for a test of key resistance at $45.9. This then connects to $46.5 and $47.1.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial

Gold Near-Term Outlook

The December 2020 gold futures contract finally settled above the crucial $2050 target today. This is bullish for the near-term outlook and clears the way for at least $2091 and possibly $2130. These are the next potential stalling points because they are the larger than (1.618) target of the primary wave up from $1690.1 and the intermediate (1.382) target of the primary wave up from $1458.8, respectively.

Gold – Daily Candlesticks with RSI and KasePO Momentum Oscillators

The daily RSI and KasePO momentum oscillators are overbought. Otherwise, there are no confirmed bearish reversal patterns, signals, or setups that call for the move up to stall before reaching at least $2091.

Nevertheless, should gold fall below $2049 look for a test of $2021. This is the 38 percent retracement of the move up from the last major intra-day swing low of $1927.5. Support at $2021 is expected to hold. Settling below this will call for a deeper test of support where $1990, the 62 percent retracement, is most important for the near-term outlook.

This is a brief analysis for the next day or so. Our weekly Metals Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key COMEX precious metals futures contracts and LME Non-Ferrous (Base) metals, spot gold, the gold/silver ration, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Near-Term Oulook

The outlook for natural gas has taken on a much more bullish tone after breaking higher out of the months-long trading range between nominally $1.60 and $1.93 on Monday. The move up stalled at $2.261 today but is still poised to challenge $2.30. This is the most confluent wave projection and a crucial objective for September’s primary wave up from $1.583 and the continuation charts primary wave up from $1.432. Settling above $2.30 may initially be a challenge but will clear the way for $2.37 and likely $2.44.

Natural Gas – $0.03 Kase Bar Chart

Nevertheless, the pullback after reaching $2.261 formed a long upper shadow on the daily candlestick. The body of today’s candlestick is too big to form a shooting star, but the long upper shadow suggests the move up may be nearing exhaustion. Several daily momentum oscillators are also sitting just below overbought territory. Therefore, a significant test of support may take place soon; most likely once the $2.30 objective is fulfilled.

The move down from $2.261 this afternoon has been choppy and is most likely corrective. Even so, there is a reasonable chance for this correction to challenge $2.13 early tomorrow. Support at $2.13 is expected to hold. A move below this will call for key near-term support at $2.03. This is the lowest the first wave down from $2.261 projection and is the 38 percent retracement of the rise from $1.646. Settling below $2.03 is doubtful but would significantly dampen odds for a continued rise to $2.30 and higher during the next few days.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

WTI Crude Oil Price Forecast

The near-term outlook for WTI crude oil is bullish again after today’s move up overcame the 62 percent retracement of the decline from $42.51 and the $41.93 swing high. Most importantly, WTI challenged the smaller than (0.618) target of the primary wave up from $37.32. Waves that meet their smaller than target typically extend to their equal to (1.00) target, in this case, $44.0. Therefore, odds now favor a continued rise toward $44.0, which is also the 200-day moving average. Once $44.0 is met another test of support is anticipated.

WTI Crude Oil – $0.50 Kase Bar Chart

Nevertheless, the $42.0 area is a highly confluent technical objective. Therefore, WTI should test support early tomorrow. There is immediate support at $41.4, but the more important level is $40.8. This is the 38 percent retracement of the move up from $38.72 and is expected to hold.

Falling below $40.8 will call for a test of key support at $39.9. This is split between the 62 percent retracement and the smaller than target of the wave own form $42.51. For the move up to extend to $44.0 during the next few days as expected $39.9 must hold. Closing below this will clear the way for $39.0 and likely $38.3.

Brent Crude Oil Price Forecast

Brent crude oil is poised to reach $45.0. This is the smaller than (0.618) target of the wave up from $39.94 and the equal to (1.00) target of the first wave up from $41.72. This is a potential stalling point because it is also in line with the $45.07 swing high. Nonetheless, based on larger waves, once $45.0 is met odds will favor an eventual move to $46.9 before another major test of support.

Immediate support for tomorrow is $44.2 and then $43.7. The latter is expected to hold. Key support is $42.9. This is the 62 percent retracement of the rise from $41.72 and the smaller than target of the wave down from $45.07. Closing below $42.9 will shift near-term odds back in favor of a deeper test of support before the move up continues.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial

Gold Price Forecast

The long-term outlook for gold remains bullish. However, August gold futures formed a double top at yesterday’s $1974.9 swing high. Gold had also formed daily high wave candlesticks (or long-legged dojis) earlier in the week that implied the move up was nearing exhaustion. Today’s bearish engulfing line, a KCDpeak, and a KasePO PeakOut (confirmed overbought momentum oscillator signals) call for a test of $1929 and likely $1900 before the move up continues.

Gold – $10 Kase Bar with Double Top

The $1929 objective is the 62 percent retracement of the rise from $1900.2. This target was tested and held today when gold fell to $1930.0. Therefore, it may prove to be strong support.

The $1900 target is in line with the $1900.2 confirmation point of the double top. Settling below $1900 will confirm a larger reversal is underway and would call for a deeper correction to $1859 and possibly to the double top’s $1826 target ($1900.2 – ($1974.8 – $1900.2)).

Nonetheless, the move down is most likely corrective because ultimately the larger scale waves, sub-waves, and compound waves up from $1454.8 call for $2003. Should gold hold $1929 and overcome $1958 look for a test of $1976. Closing above this will call for gold to reach $2003 before possibly stalling again.

This is a brief analysis for the next day or so. Our weekly Metals Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key COMEX precious metals futures contracts and LME Non-Ferrous (Base) metals, spot gold, the gold/silver ration, and gold ETFs. If you are interested in learning more, please sign up for a complimentary four-week trial.

Natural Gas Price Forecast

September natural gas settled above the crucial $1.90 level today. This was the smaller than (0.618) target of the primary waves up from $1.583 and $1.646. Most importantly, $1.90 has been near the top of the trading range on the continuation chart since mid-May and was the smaller than target of the wave up from $1.432.

Closing above $1.90 was bullish for the near-term outlook and calls for prices to challenge $2.00 and possibly $2.07. For September $2.00 is the equal to (1.00) target of the wave up from $1.646 and $2.07 is the equal to target of the larger wave up from $1.583. Therefore, September’s wave formation calls for prices to eventually reach $2.07. However, $2.00 is a psychologically important threshold that is in line with the 200-day moving average on the continuation chart. Therefore, natural gas will likely be hard-pressed to overcome $2.00 during the next few days and perhaps even the next several weeks.

Natural Gas – $0.02 KaseBar Chart

Also, with August expiring at $1.854 today prompt month prices may be drawn down to close the rollover gap before rising much higher.

Nevertheless, there are no confirmed patterns or signals that call for the move up to stall before reaching at least $1.95 and likely $2.00.

Should natural gas turn lower early tomorrow, look for initial support at $1.88 and then $1.83. These are the 21 and 38 percent retracements of the move up from $1.646. At $1.83 the rollover gap up from $1.854 will be filled. Therefore, this level is expected to hold. Closing below $1.83 will provide more evidence that prices are still trading in a wide range between nominally $1.60 and $1.90 for the interim.

This is a brief analysis for the next day or so. Our weekly Natural Gas Commentary and daily updates are much more detailed and thorough energy price forecasts that cover key natural gas futures contracts, calendar spreads, the UNG ETF, and several electricity contracts. If you are interested in learning more, please sign up for a complimentary four-week trial.

WTI Crude Oil Price Forecast

The long-term outlook for WTI crude oil is bullish. However, WTI continues to trade in a very erratic and indecisive manner in the near-term. The move up looks exhausted and some technical patterns and signals suggest a sizable test of support should take place before the move up continues. However, as prices have risen to new highs prior swing lows have held. This is the most basic definition of an uptrend. Also, the 21-day moving average continues to hold on a closing basis.

Realistically, the near-term outlook for WTI is neutral. Even so, today’s decline shifts odds nominally in favor of a test of $40.5 and possibly $39.9 tomorrow. These are the smaller than (0.618) and equal to (1.00) targets of the compound wave down from $42.51, respectively. Closing below $40.5 will also take out the 21-day moving average and a close below $39.9 will take out the last swing low of $39.97. This will also increase odds for a deeper correction to $39.2 and possibly $38.6 during the next few days.

WTI Crude Oil – $0.35 Kase Bar Chart

Conversely, each time WTI has looked as though it will break lower prices have turned higher and risen to a modest new high shortly thereafter. Therefore, caution is warranted. Resistance at $41.9 is expected to hold. A move above this would invalidate the wave down from $42.51 that projects to $40.5 and lower. This would also call for WTI to rise to a new high of at least $42.8 before another major test of support takes place.

Brent Crude Oil Price Forecast

Brent’s near-term outlook leans neutral-to-negative and the move down is poised to challenge at least $43.0. Closing below this will call for $42.1 and possibly lower.

Nevertheless, the 21-day moving average held again today and the move down has been extremely choppy. Therefore, the decline is most likely corrective. Should Brent overcome the $44.34 intra-day swing high look for the move up to extend to $45.3 before another significant test of support takes place.

This is a brief analysis for the next day or so. Our weekly Crude Oil Forecast and daily updates are much more detailed and thorough energy price forecasts that cover WTI, Brent, RBOB Gasoline, Diesel, and spreads. If you are interested in learning more, please sign up for a complimentary four-week trial.