Crude Oil Price Outlook Remains Fragile - Will Near-Term Support Hold？

Crude Oil Price Chart and Analysis:

• Crude oil hits support – will it hold？

• Oil looks heavily oversold in the short-term.

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Crude Oil Slump

The price of a barrel of crude oil fell by over 12% last week as trade fears heightened, undermining global growth concerns. Oil also fell through noted support levels, including the 200-day moving average, which accelerated the move lower and took oil to a five-month low. We warned two-weeks ago that chart support looked weak with the 50% Fibonacci retracement level breached in subsequent days.

Oil has now bounced off the 61.8% Fibonacci retracement level and this may hold in the short-term, unless trade war rhetoric increases. The crude oil chart is also flashing an extreme oversold signal with the CCI indicator at once stage hitting -250, a level not seen since mid-December last year when the price of oil touched $50.0/bbl.

Support on the chart is seen at $60.63/bbl. – the previously mentioned Fibonacci retracement level –ahead of a cluster of highs/lows around the $59/bbl. area. Crude oil will need to consolidate around current levels, or higher, to start rebuilding some confidence in the market, which has fallen nearly 20% in less than six weeks. To the upside, the gap created on last Fridays (May 31) candle between $61.6/bbl. and $64.9/bbl. will be the bulls first target.

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Crude Oil Daily Price Chart (August 2018 – June 3, 2019)

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