Crude Oil Outlook for 2024

Crude Oil Prices Forecast Video for 2024

After all, we have seen oil spike after the Hamas attack on Israel and the subsequent Israeli actions. This had many traders around the world concerned about the possibility of an escalation throughout the Middle East, but so far only the Houthis in Yemen seem to be willing to step up and start fighting. Because of this, toward the end of the year crude oil markets breathe a bit of a sigh of relief.

Recession

That being said, there are a lot of concerns about recession around the world. This has a major influence on crude oil markets, and the perceived demand. There is a direct correlation between economic activity and crude oil markets, which of course is well known. At this point, a recession seems likely, but the narrative keeps changing, and of course we also have an end-of-the-year meeting between MBS and Vladimir Putin that could signal that perhaps OPEC+ is going to do everything it can to stabilize pricing.

The Counterargument

With central banks around the world seemingly ready to pivot, and the Federal Reserve already signaling this, it suggests that we will have a bit of “easy money” sometime during 2024. This typically will spur economic growth, and therefore demand for crude oil could pick up as a result. I suspect that this will be enough to arrest some of the massive selloff but won’t necessarily send crude oil skyrocketing on its own. It is because of this that I look to the technical analysis through the prism of a likely year of stabilization.

Technical Analysis

The technical analysis for the crude oil market suggests that there is going to be a bit of a range, and as things stand currently, it looks like the $65 level is a massive support level in the WTI Crude Oil market, which could kick off even deeper selling if we were to break down below it. That being said, we are starting to see signs of stabilization at the very end of 2023, and this is an area where we’ve seen a lot of action previously. It is because of this that I anticipate that the beginning of the year may very well kick off with crude oil rallying a bit. Will it start to take off and scream all time new highs?

Now I don’t think we have anything like that ahead. In fact, this looks like a market that will probably try to stabilize between $65 on the bottom and $95 on the top. This does make a certain amount of sense as well, due to the fact that there seems to be a psychological reluctance to have crude oil markets above $100 a barrel historically. With this, I think range bound traders are probably going to have a fairly good year. This is backed up by the 50-Week EMA and the 200-Week EMA indicators going somewhat flat as well.

This of course assumes that crude doesn’t have some type of external force that causes major chaos. There is always the possibility that conflict in the Middle East spreads out, but as time goes on the odds of that seem to decrease. Another outlier might be if we have some type of major economic calamity, which could open up a move down to the $40 level, but at this point it seems like the market is reluctant to try to price something like that in.