Crude Oil Price Forecast – oil markets fall hard to start the week

Crude oil markets were very noisy during the trading session on Monday, initially gapping lower, and then falling a bit before turning around and testing the highs of the gap again. It looks as if the market needs to make some type of decision soon, as the volatility is picking up. · FX Empire

Christopher Lewis

Updated Mon, Jul 2, 2018, 10:18 PM

WTI Crude Oil

The WTI Crude Oil markets gapped lower at the open on Monday, to start the week with quite a bit of volatility. The market has been noisy to say the least, and overall I think that we are trying to see whether the volatility will continue to lift prices, or perhaps if we have gotten too far ahead of ourselves. If we break down below the $72.50 level, the market is likely to continue to go much lower. Otherwise, if we can break above the $75 level, it’s likely that the market would continue to go much higher. Regardless, I think the one thing you can probably count on is a lot of noise in this market, as we continue to see a lot of questions as to global trade, and of course tensions with the Iranians.

Brent

Brent markets also gapped lower to start the week, but then rally enough to turn around and test the previous resistance from the gap and continue to fall from there. The market looks likely to continue to go down to the $77 level where I would anticipate seeing a bit of support. If we can break down below that level, then the market could unwind a bit more, perhaps reaching as low as $75. Keep in mind that the US dollar continues to strengthen, and that of course will work against the value of crude oil, not to mention the threat of extended trade tariffs between the Chinese and Americans.