Crude Oil Price Forecast – Crude Oil Markets Sit Just Below Major Resistance Again

Crude Oil Prices Forecast Video for 06.04.23

WTI Crude Oil (US) Technical Analysis

The West Texas Intermediate Crude Oil market has done very little during the trading session on Wednesday as we are threatening the 200-Day EMA, which sits at the very top of the previous consolidation area. Remember, the market had gapped on Monday after OPEC+ suggested that the cartel was going to start cutting production by 1.6 million barrels starting in May, and there are significant concerns about the supply of crude oil.

However, there are a lot of questions to be asked about why OPEC decided to cut production. The most obvious answer is that they are concerned about pricing power, as the world heads into a global recession. Remember, futures markets tend to fill gaps, and I think this one’s not going to be any different. The 200-Day EMA offers a little bit of resistance as well, so I do think that if we can break down below the lows of the last couple of sessions, we probably try to fill that gap. On the other hand, if we take off above the 200-Day EMA, then it’s possible that the market could race towards $85.

Brent Crude Oil Technical Analysis

Brent has gone back and forth during the trading session as well, with the 200-Day EMA sitting right around the $87.10 level. This of course will offer resistance, but again, just like the WTI market did, we have seen a lot of noisy behavior, and I think we also have the gap underneath that gets filled sooner rather than later. The 50-Day EMA’s is just above the beginning of the gap, so I think you got an argument to be made for that being the target. However, it’s worth noting that if the market were to break above the $87.50 level, then we could make a move towards the $90 level, but again, there are a lot of concerns out there about economic activity, and then it’s probably going to be a situation where oil eventually falls.

Historically speaking, most of the time that OPEC cuts production, the boost that it gets in pricing power typically doesn’t last that long, and therefore it is more often than not a “fade the rally” type of situation. I suspect this time will be any different.

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