WTI Crude Oil Forecast: Continues to Churn

• The West Texas Intermediate Crude Oil market has pulled back just a bit early during the day on Tuesday, only to turn around and show signs of life.
• At this point, we continue to go back and forth after falling rather hard, so it’s not a huge surprise to see that we are taking a significant amount of time to try to figure out whether we can continue to go lower.
• The $75 level is an area where we would see a lot of attention, and therefore I think we probably see the market continue to chop around in this area.

At this point, the 50-Day EMA sits right around the $80 level, and I think it offers a short-term ceiling in this market. Any signs of a rally I will be looking for selling in that general vicinity when we do start to see selling pressure. On the other hand, if we turn around and break down below the $73.50 level, then I think that the WTI Crew Oil market will probably start falling to reach down to the $75 level. Either way, we are in a downtrend, and I don’t have any interest in buying crude oil now. This is not to say that it cannot rally, just that I don’t have any interest in trying to fight the overall trend. The trend is firmly ensconced and with good reason.

Waiting for the Federal Reserve

Remember, the world is currently during a slowdown, and that almost certainly means that we are going to see less demand for crude oil as energy is the lifeblood of the global economy. People are not buying things, there will be as much need to ship them, etc. Furthermore, the flow of crude oil has not been massively impacted by sanctions on Russia, because quite frankly Russia has just switched to providing for India and China, while the rest of the world gets oil from the usual sources.

At this point, if we can break above the $82 level, then maybe we can get to the 200-Day EMA, but I just don’t see that happening very easily. Furthermore, the Thursday session features the Consumer Price Index numbers, giving us an idea as to how much inflation there is in the United States, and of course the carry through to what the Federal Reserve will do as far as trying to crush demand overall.