Crude Oil Price Forecast: WTI Near-term Bullish Amidst Broader Range

[MongiIG]

Jun 28, 2022 | DailyFX
Paul Robinson, Strategist

CRUDE OIL TECHNICAL HIGHLIGHTS:

• WTI rallying after big sell-off, has room to go
• The price action since March could form big-picture tech pattern
• For now, nimble short-term trades appear to be best fit for conditions

WTI crude oil (CL) continues the rally it began to end last week after taking a beating from $123 down to $101. The outlook appears favorable in the near-term, while the broader outlook is mired in what will probably amount to range activity.

This makes the trading environment most favorable to those with short-term outlooks of a few days or less. Volatility is high so there should continue to be plenty of two-way trade. Giving the bounce the benefit of the doubt, we could see WTI soon revisit the low $120s again soon.

A break below the recent low at $101.53 will dent this outlook and will likely bring into play the 200-day moving average at $91.63 and rising as well as the April low at $92.93.

Pulling back to the broader picture, oil (& commodities in general) are in a secular bull market, and so until there is evidence that it is over we need to consider the longer-term tailwinds supporting higher prices.

Without diving into fundamental specifics, the trend alone still tells us that oil is pointed higher. On that, it is likely that since the spike-high in March oil is posting a consolidation pattern that will eventually lead to another major leg higher.

The consolidation pattern that is beginning to emerge is a symmetrical triangle. It is still early and will take a couple of months more to fill out, but worth taking into consideration as we roll through the summer.

It could be the pattern that finally sends WTI to record levels above the 2008 spike at $147. If you believe this is a secular bull market, then a new record high appears imminent. For now, taking it one day at a time the focus in on the near-term price action until we see the broader outlook develop further.

CRUDE OIL (CL1!) DAILY CHART

WTI Crude Oil Chart by TradingView