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.

0

Notifications

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

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZX8cS https://t.co/qdrsi61CN8
  • It seems the markets are riding high, but risk is always lurking around the corner. Consider your escape plan before you find yourself in collapsing market. What are the top havens for different conditions in 2021? Find out from @JohnKicklighter here: https://t.co/1oeXWEsJkb https://t.co/IyQdfq29fz
  • Myth or fact? One thing is for sure, there are a lot of misconceptions about trading. Knowing the difference between common trading myths and the reality is essential to long-term success. Find out about these 'myths' here: https://t.co/EDvQdHfIPm https://t.co/R7pa7DsM8n
  • What are some monetary policies that could affect Gold this quarter? Get your Gold free forecast here: https://t.co/bTXkGN1CIM #DailyFXGuides https://t.co/EhdZpmkzaH
  • Even more remarkable than the record high levels of leverage registered in US equities this past week was the attention it garnered. Paying attention to risk is a threat when markets are this high and the docket as dense as it is this week. My outlook: https://www.dailyfx.com/forex/video/daily_news_report/2021/01/23/Dow-VIX-Tesla-and-Leverage-Reflect-Greater-Risk-to-the-Relentless-Bull-Market.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/KBOJIRPTQe
  • Consolidation or bull flag? A bull flag is a continuation pattern that occurs as a brief pause in the trend following a strong price move higher. Learn how to better spot these formations here: https://t.co/yOEvLjKnct https://t.co/qP2PbS4dsY
  • Are you new to trading? Technical analysis of charts aims to identify patterns and market trends by utilising different forms of technical chart types and other chart functions. Get a refresher on technical analysis or begin building your knowledge here: https://t.co/qV3c7a4YR3 https://t.co/POGWDIkqqz
  • USD hegemony is at risk thanks to changes in the global economy and the long-term consequences of the US-China trade war. Get your market update from @CVecchioFX here: https://t.co/5GO9UrvO4y https://t.co/H76jNJJxU5
  • Did you know a Doji candlestick signals market indecision and the potential for a change in direction. What are the top five types of Doji candlesticks? Find out https://t.co/c51s3IBcEu https://t.co/1TiEWCbJ6t
  • Use this technical analysis pattern recognition skills test to sharpen your knowledge: https://t.co/Qgz89PTxnu https://t.co/fN2mfHgpON
Oil Forecast: Will Crude Drop Below $20 Amid OPEC, Virus Gloom?

Oil Forecast: Will Crude Drop Below $20 Amid OPEC, Virus Gloom?

Rich Dvorak, Analyst

CRUDE OIL FORECAST: OIL PRICE AT RISK OF FURTHER DOWNSIDE AS OPEC FALLOUT & CORONAVIRUS LOCKDOWN LINGER, EXACERBATE OIL MARKET SUPPLY-DEMAND IMBALANCE

  • Crude oil price action hovers around $20.00 per barrel after crashing 70% from January’s high
  • Oil prices have crumbled in response to coronavirus-driven recession risk and a breakdown in OPEC supply talks earlier this year
  • Oil could face further selling pressure as demand for crude oil takes a nosedive alongside global GDP growth forecasts while tension between Saudi Arabia and Russia persists

A mind-boggling plunge in crude oil prices over the last three months has pushed the commodity about 70% below its most recent swing high printed on January 08. The sharp selloff in crude oil price action that began earlier this year – driven largely by the novel coronavirus outbreak (COVID-19) and rekindled recession risk – gained momentum after a breakdown in OPEC supply cut talks in March ignited an oil price war.

CRUDE OIL PRICE CHART: DAILY TIME FRAME (23 DECEMBER 2019 TO 01 APRIL 2020)

Crude Oil Price Chart Oil Forecast WTI Crash Amid OPEC and Coronavirus

Chart created by @RichDvorakFX with TradingView

The nosedive in crude oil prices drove the commodity to down to the $20.00 handle – a level not seen in nearly two decades. Following an unprecedented wave of accommodative monetary policy intervention and fiscal stimulus measures, however, it appears that the steep slide in crude oil price action has steadied alongside an apparent recovery in investor sentiment.

Oil - US Crude BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -7% -13% -10%
Weekly 3% -4% -1%
Learn how to use sentiment in your trading strategy
Get My Guide

From a technical perspective, the impending Bollinger Band squeeze might suggest selling pressure has subsided, which may facilitate a retracement higher. Yet, while crude oil might have potential to put in a fresh bottom around this psychologically-significant area of confluence, the risk of additional downside still looms.

CRUDE OIL PRICE CHART: MONTHLY TIME FRAME (APRIL 1998 TO APRIL 2020)

Crude Oil Price Chart Oil Forecast OPEC Oil Crash Supply War Saudi Arabia Russia

Chart created by @RichDvorakFX with TradingView

The possibility that crude oil price action takes another hard tumble warrants serious consideration seeing that a recession is likely unavoidable. Furthermore, with major oil producers like Saudi Arabia and Russia still flooding the market with crude, which is exacerbating the already-stark supply imbalance amid oil demand destruction, the price of crude oil could plunge below the $20.00 mark.

Understanding the Core Fundamentals of Oil Trading
Understanding the Core Fundamentals of Oil Trading
Recommended by Rich Dvorak
Check out the key drivers of oil prices, supply and demand
Get My Guide

If crude oil drops below $20.00, the commodity could quickly target the 2001-2002 lows near $17.10, which may be eyed by bears before the December 1998 low around $10.65 comes into focus. On that note, upcoming weekly jobless claims and monthly nonfarm payrolls data, might serve as additional fundamental catalysts that drive the commodity’s next direction.

Keep Reading: Crude Oil Price Drives Lower with S&P 500, VIX Snaps Back

-- Written by Rich Dvorak, Junior Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

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

DISCLOSURES