Crude Oil Price Forecast: Faces Pullback Risk After 26-Week Highs

Crude oil completed a bullish measured move (purple arrows) at 80.30 last week on the way to a swing high of 80.86. In addition, a 78.6% Fibonacci retracement completed at 80.65. The week’s advance had previously shown strength by busting out above a top trendline that defines the top boundary of a large symmetrical triangle formation. In addition, the week ended above that line thereby confirming strength.

Last week’s closing was the highest weekly closing price in 26 weeks, and it reflects improving demand for crude oil. However, it looks like three weeks up following a bull flag breakout starting the end of last year maybe the end of the advance before profit taking takes hold, leading to a bearish retracement. The week ended weak, below the halfway point of the week’s trading range.

Bearish Weekly Reversal Triggers

Subsequently, a bearish weekly reversal triggered today, Tuesday, as crude fell below last week’s low of 77.30. This was the first time in seven weeks that a prior weekly low was broken to the downside and reflects the possibility that crude may have topped for now and heading into a correction. Nonetheless, support for the day was seen at 76.15 and it was followed by an intraday bounce. Interesting to see support was seen at the intersection of two trendlines.

Both the longer-term rising line across the bottom of the symmetrical triangle pattern and the more recent rising trendline for the near-term uptrend. Further, the 50-Week MA (not shown) is at 76.37, also in today’s support zone. Crude oil closed above the 50-Week line for the first time since July 2024 two weeks ago. This is the first pullback to test the 50-Week line as support.

Reaches Key Initial Support

It is possible that today’s low completes a pullback before crude is ready to proceed higher. If that is the case, then a decisive breakout above today’s high of 78.32 would provide a daily bullish reversal signal. The first barrier then confronted would be last week’s high of 80.76. If that high can be exceeded and crude stays above it, a breakout above the trendline and triangle formation will be confirmed.

Drop Below 76.15, Short-term Bearish

Otherwise, the expectation is for a deeper pullback first. A decline below today’s low of 76.15 would trigger a bearish continuation of the retracement. Price areas to watch for support on the way down include the 38.2% Fibonacci retracement and 200-Day MA at 75.54 and 75.42, respectively. A little lower is the 20-Day MA at 74.75 and the 50% retracement at 73.93.

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