Crude Oil Price Forecast: Downside Stalls on OPEC Favoring Extension

While  OPEC may be winning in their battle to balance the global Oil market, it is not necessarily happening on the timeframe they would prefer. Naturally, it is not helpful that Shale production is at its highest levels since 2015. The U.S. Shale r esurgence coupled with OPEC’s supply management continues to provide hope for Oil bulls. While Crude dropped ~3% on Wednesday, there is also likely to be volatility on e xpiration-position squaring is occurring as May WTI contract expires Thursday .

The weekly chart below of the May contract shows key support in the $50.38-$49.59 zone. $50.38 is the 50% retracement of the March range, $49.91 is the April Opening Range low, and $49.59 is the 61.8% retracement of the May range.

Should these levels fail to hold up the price , traders will likely turn their attention to the Trendline drawn off the August 2016 low near $47.90, which held support well in March. This Trendline aligns well with the 55-WMA (blue line on the chart .) The sentiment picture is aligning with the downside view as will be explained below…


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