September WTI crude oil’s settle above $44.4 Friday and $45.7 Monday has opened the way for the move up to continue. The Stochastic has risen into overbought territory, but there is no technical evidence the move will stall.

The next targets are $46.3, $47.0, and $47.9. The $47.9 level is a crucial confluence point split between the 62 percent retracement of the decline from $52.73 and the 1.618 projection of the wave up from $39.19. A sustained close over $47.9 would confirm the market is moving toward bullish territory again.

A pullback may take place soon. However, support at $45.3 should hold. This is near Monday’s midpoint. Key support for the near-term is $44.7. A close below this would call for an extended downward correction to at least $44.1 and possibly $43.5.

This is a brief analysis and outlook for the next day or so. Our weekly Crude Oil Commentary and intraweek updates are a much more detailed and thorough energy price forecast. If you are interested in learning more, please sign up for a complimentary four-week trial.

September WTI crude oil’s correction up from $39.19 gained ground on Monday when it settled above $42.8. Media outlets indicate the rise was due renewed hopes that OPEC members might consider freezing production levels. OPEC announced on Monday that they would hold informal talks at an energy conference in September.

That said, from a technical perspective, the move down was due for a correction. September WTI briefly moved into bearish territory last week when it settled below $40.4. However, a highly confluent and important $39.2 target held when the $39.19 swing low was made. The Stochastic has since risen out of oversold territory, and several intraday charts confirmed bullish momentum divergences.

Friday’s hanging man candlestick pattern was negative by Monday’s close over $42.8. This opens the way for $44.4. This is the 38 percent retracement of the decline from $52.73 to $39.19 and an important decision point for the near-term. If the move down is going to continue within the next few weeks, $44.4 should hold. However, a close over $44.4 would call for an extended correction and could be an early indication that another long-term bottom has been made.

As the move up extends over the next few days, look for near-term support at $42.5, $41.8, and $40.8. The $42.5 level will probably be tested early Tuesday, but should hold. This is near Monday’s midpoint. Key support is $40.8 because it is the 62 percent retracement of the move up from $39.19. A close below this would shift odds in favor of testing $39.19 again.

This is a brief analysis and outlook for the next day or so. Our weekly Crude Oil Commentary and intraweek updates are a much more detailed and thorough energy price forecast. If you are interested in learning more, please sign up for a complimentary four-week trial.

The U.K.’s vote for Brexit came as a shock to many investors and traders around the world. Equity markets have tumbled and crude oil followed suit as the U.S. dollar has risen substantially. Some pundits think the downturn in oil has been overdue, and warn that the market is still oversupplied and could slip further in coming weeks and months. Others hold the recovery will continue and that the decline is likely an overreaction to Brexit.

It is clear that sentiment is mixed. However, charts tell a clearer story. The long-term bias is positive, and ultimately odds still favor the move up. However, the downward correction is poised to continue for the near-term.

Negative Factors

August WTI met confluent support near $46.0 on Monday. This was in line the 0.618 projection of the wave $50.54 – 46.7 – 48.45 and 1.382 projection of the wave $48.45 – 46.92 – 47.96. Near-term odds favor a decline to at least $44.7, the 1.00 projections of the waves $52.28 – 46.4 – 50.54 and $50.54 – 46.7 – 48.45. This is a very important target and decision point for WTI. A close below $44.7 would open the way for targets in the low $40s. It is at those targets that the market will need to decide whether the move up will continue or a long-term bearish outlook would be adopted again.

Positive Factors

The upward correction that began late Monday afternoon may extend to $46.8 and even $47.5 in early trading Tuesday. However, $47.5 should hold. A close over $47.5 would call for a test of key resistance levels above $50.0, that if overcome, would indicate the downward correction is over.

This is a brief analysis and outlook for the next day or so. Our weekly Crude Oil Commentary is a much more detailed and thorough energy price forecast. If you are interested in learning more, please sign up for a complimentary four-week trial.

The falling U.S. dollar and higher probability the U.K. will vote to remain in the European Union are reportedly causes for crude oil’s recovery. However, some analysts have stated that increasing U.S. rig counts and production coming back online in Canada will keep a lid on oil prices for the near term.

August WTI crude oil met crucial support at $46.41 on Friday before turning higher and forming a daily bullish engulfing line. So far, the move up to $50.0 has retraced 62 percent of the decline from $52.28 to $46.4. A close over $50.0 would significantly increase odds for $51.0 and possibly $52.3 later this week.

Support at $48.6 will most likely hold. The key level for the next few days will be $47.8. These are the 38 and 62 percent retracements from $46.4 to $50.0, respectively. A close below $47.8 would indicate the move up has likely formed Wave B of a larger scale ABC correction. This would in turn open the way for the downward correction to extend to targets in the mid-to-low $40s.

This scenario is less likely given the strong price rise over the past few days. With all factors considered, crude oil will most likely settle into a range in the upper $40s and low $50s soon while it sorts through the conflicting geopolitical, fundamental, and technical factors.

This is a brief analysis and outlook for the next day or so. Our weekly Crude Oil Commentary is a much more detailed and thorough energy price forecast. If you are interested in learning more, please sign up for a complimentary four-week trial.

As WTI crude oil prices fall from the recent $51.67 high, some reports indicate the pullback is due to the rising U.S. dollar and increased rig counts for the second week in a row. Pundits have also stated the sharp price surge could encourage some producers to increase production, keeping the market oversupplied. Others still believe recent supply disruptions in Canada and Nigeria will be supportive.

From a technical perspective, WTI’s move up had become extended and was due for a correction. The confirmed dark cloud cover, bearish daily divergences, weekly shooting stars, and monthly evening star setups indicate the majority of technical factors are negative for the near-term.

Support at $48.6 was challenged Monday, but held on the close. A move below $48.6 in early trading Tuesday would open the way for at least $47.7 and possibly $46.7. Both targets are near major swing lows that may hold initially. Therefore, we expect the move down will be choppy as it unfolds over the next few days.

There is a modest chance that Tuesday’s morning star setup will test Friday’s $49.8 midpoint first. This is near the 38 percent retracement of the decline from $51.67 to $48.16 and the 1.00 projection of the small wave up from $48.16. Key resistance is $50.3. This is the 62 percent retracement and 1.618 projection. Resistance at $50.3 is expected to hold. A close over $50.3 would call for prices to retest the $51.67 swing high.

This is a brief analysis and outlook for the next day or so. Our weekly Crude Oil Commentary is a much more detailed and thorough energy price forecast. If you are interested in learning more, please sign up for a complimentary four-week trial.

For the past few weeks, WTI crude oil has been trading in a tight range as it tries to sort through recent events and fundamental factors. Reports indicate Monday’s close at a 10-month high was due to concerns over continued supply disruptions and speculation that the Federal Reserve will not raise interest rates this month.

From a technical perspective, the recent wave formations show that prices are poised to rise to targets above $50.0 over the next few days before reaching the next major decision point in the mid-$50s. July WTI closed above the 0.618 projection of the wave up from $47.26 on Monday. Waves that overcome the 0.618 projection typically extend to at least the 1.00 projection, in this case $50.7. Therefore, odds favor a test of $50.7. A close over $50.7 would call for $51.8 and possibly higher this week.

Support at $48.4 should hold. This is the 0.618 projection of the wave down from $50.21. It is also near the 62 percent retracement of the move up from $47.75 to $49.9. A close below $48.4 would call for a test of $47.5, which is near the bottom of the recent trading range. A close below this would open the way for an extended correction to $46.2 and possibly lower.

This is a brief analysis and outlook for the next day or so. Our weekly Crude Oil Commentary is a much more detailed and thorough energy price forecast. If you are interested in learning more, please sign up for a complimentary four-week trial.

Reports indicate traders and investors have been focused on the return of crude oil from recent worldwide supply disruptions, primarily in Canada and Nigeria, in addition to swelling output from Iran. The rising U.S. dollar has also put bearish pressure on prices after the Fed’s latest policy meeting notes suggested a June rate hike possible.

From a technical standpoint, WTI reached significant targets just below $50.0 late last week before forming daily bearish divergences and daily hanging men. These factors indicate the move up is exhausted. However, so far, July WTI’s decline from $49.56 has been extremely choppy and is most likely corrective.

The correction has held the 38 percent retracement from $43.65 to $49.56, but is positioned to extend a bit lower. There is highly confluent support at $46.8, which will likely be met before the move up continues. A close below $46.8 would call for an extended correction to $45.6.

That said, the move up from $47.4 on Monday shows that prices should test $48.6 early Tuesday before attempting $46.8 again. This level should hold, but a close over $48.6 would open the way for $49.2. A close over $49.2, would indicate the downward correction is most likely over and call for $50.2 and higher.

In summary, look for a test of $47.4 followed by $46.8. A close beyond either of these levels will give the market a better sense of near-term direction and how low the correction will extend before prices ultimately turn higher again.

This is a brief analysis and outlook for the next day or so. Our weekly Crude Oil Commentary is a much more detailed and thorough energy price forecast. If you are interested in learning more, please sign up for a complimentary four-week trial.