Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
More View More
Oil Price Forecast: Can OPEC+ Stave Off a Bear Market?

Oil Price Forecast: Can OPEC+ Stave Off a Bear Market?

David Song,
What's on this page

Oil Price Talking Points

The sharp selloff in the price of oil appears to have stalled following fresh remarks from the Organization of the Petroleum Exporting Countries (OPEC), and recent price action raises the risk for a larger rebound as crude fails to extend the series of lower highs and lows from the previous week.

Image of daily change for major financial markets

Oil Price Forecast: Can OPEC+ Stave Off a Bear Market?

Image of daily change for crude oil prices

Oil prices have fallen more than 20% from the 2019-high ($66.60) as the Trump administration plans to impose a 5% tariff on all goods coming from Mexico, and the ongoing shift in U.S. trade policy may keep oil prices under pressure especially as the International Monetary Fund (IMF) insists “consumers in the US and China are unequivocally the losers from trade tensions.”

Image of Russia Energy Ministry announcement

It remains to be seen if OPEC and its allies will respond to the weakening outlook for global growth as Saudi Arabia Minister of Energy, Industry and Mineral Resources, Khalid Al-Falih, insists that “there’s an emerging consensus among OPEC+ countries to continue their work towards market stability in the second half of the year.” The minister goes onto say that the group remains committed “to do whatever it takes to stabilize markets,” and the OPEC+ alliance may help to stave off a bear market as Russia cuts crude output by an average 317K b/d in May.

With that said, it seems as though OPEC and its allies will continue to regulate the energy market in 2019, but the growing threat of a trade war between the U.S. and China, the two largest consumers of oil, may keep crude under pressure as both price and the Relative Strength Index (RSI) snap the bullish trends from earlier this year.

Crude Oil Daily Chart

Image of oil daily chart
  • Keep in mind, a ‘golden cross’ formation took shape last month as the 50-Day SMA ($61.56) crosses above the 200-Day SMA ($59.95), but the difference in slope undermines the potential for a bullish signal.
  • With that said, downside targets remain on the radar as crude fails to preserve the upward trend from earlier this year, with a break/close below the $51.40 (50% retracement) to $51.80 (50% expansion) region opening up the Fibonacci overlap around $48.80 (38.2% expansion) to $49.80 (78.6% retracement).
  • Recent developments in the RSI suggest the bearish momentum is gathering pace as it extends the downward trend from April and sits in oversold territory, but the oscillator may flash a textbook buy signal over the coming days should the indicator cross back above 30.
  • In turn, a move back above the $54.90 (61.8% expansion) to $55.60 (61.8% retracement) area may spur a move back towards $57.40 (61.8% retracement), with the next region of interest coming in around $59.00 (61.8% retracement) to $59.70 (50% retracement).

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss key themes and potential trade setups.

For more in-depth analysis, check out the 2Q 2019 Forecast for Oil

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other markets the DailyFX team is watching? Download and review the Top Trading Opportunities for 2019.

--- Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.