Oil Q2 2021 Technical Forecast

Crude Oil Technical Forecast Following Cyclical Sample

After an spectacular begin to 2021, the oil forecast for the second quarter of the yr is missing an excessively optimistic tone given a weaker image for demand and stronger development in rival provide, as was introduced by OPEC’s outlook for the following two quarters.

Seeking to the US Power Data Administration (EIA) for steering, their forecast sees declining crude oil costs and a extra balanced oil market, which displays international provide surpassing demand in the course of the second half of 2021. Though the EIA expects inventories to fall by 1.2 million b/d within the first half of 2021, will increase in international oil provide will contribute to inventories rising by nearly 0.Four million b/d within the second half of 2021. Because the chart under reveals, their forecast primarily based on confidence intervals is that WTI oil costs are prone to keep between $50 and $78 per barrel with a slight declining tendency.

WTI Crude Oil Worth Forecast

Supply: EIA

Trying on the US crude oil weekly chart, latest worth motion appears to have adopted related patterns displayed again when the worth was round present ranges a couple of years in the past. Since Might 2019, WTI crude oil has confronted three main pullbacks till the Covid-19 meltdown in 2020. In all three of those situations, its worth retraced between 19% and 25%, coming in near the 2016/17 horizontal mean-reversion line at 48.85.

Following this theme, the latest pullback to finish the primary quarter might prolong additional earlier than we see a reversal on the again of bullish momentum constructing on decrease, extra engaging costs. A pullback on common just like the three seen up till March 2020 might witness present worth fall again in direction of the 51.80 mark. This falls in keeping with the 76.4% Fibonacci retracement from the Covid-19 induced meltdown and up to date assist.

WTI Crude Oil Worth – Weekly Timeframe (October 2017 – March 2021)

Supply: IG, Chart ready by Daniela Sabin Hathorn

Zooming in to a each day timeframe, bearish momentum appears to have subdued barely within the ultimate week of March, however danger continues to be tilted to the draw back, as do momentum indicators just like the MACD and the stochastic oscillator. The autumn under the ascending trendline from the November 2020 lows can be a trigger for concern for short-term oil bulls. This performs nicely into the broader correction steered by the weekly chart, at which level 51.75 seems like a robust space of assist, adopted by the 48.85 horizontal line.

WTI Crude Oil Worth – Day by day Timeframe (August 2020 – March 2021)

Supply: IG, Chart ready by Daniela Sabin Hathorn