Is crude oil poised to break below last year’s lows?
Crude oil extended its short-term downtrend yesterday, dipping below the $68 level. It reacted to the stock market’s sell-off and weak economic data. This morning, oil continues to decline, reaching the $67 level. Investors are awaiting President Trump’s speech in Congress, scheduled for 9:00 p.m., which could impact markets, including energy prices.
Crude Oil Moves Closer to Its November-December Lows
The daily chart of crude oil futures shows a clear downtrend that began with the January 15 local high of $79.39. Key support is around $67, with the next one between $65 and $66, marked by the September 10 low of $65.27.
No positive signals are evident, although, one could expect a rebound or at least a pause near current levels.
Weekly Chart: Crude Oil Extends Its Consolidation
Crude oil remains within a medium-term consolidation. Since September 2023, the market has been forming lower highs, which typically suggests a downside breakout. However, consolidation continues for now.
Conclusion
Crude oil remains in a downtrend, influenced by stock market uncertainty, rising gold prices, and weaker economic data, including the recent negative Atlanta Fed GDP predictor readings. But is this a good time to open a short position? I don't think so - the market is approaching strong medium-term support levels and could move sideways or rebound.
For now, my short-term outlook is neutral.
Here’s the breakdown:
- Crude oil is moving lower after last week’s rebound, with sentiment still negative amid stock market weakness, data.
- In my opinion, the short-term outlook is neutral.
The full version of today’s analysis - today’s Oil Trading Alert - is bigger than what you read above, and it includes the current Crude Oil futures contract position. I encourage you to subscribe and read the details today (with a single-time 7-day free trial). Oil Trading Alerts are also a part of our Diamond Package that includes Gold Trading Alerts and Stock Trading Alerts.
And if you’re not yet on our free mailing list, I strongly encourage you to join it - you’ll stay up-to-date with our free analyses that will still put you ahead of 99% of investors that don’t have access to this information. Join our free oil newsletter today.
Thank you.
Paul Rejczak,
Stock Trading Strategist