[24 July 2024]
Today, StockCharts365 has taken a closer look again at the technical picture for the oil price (Brent Spot).
The oil price (Brent Spot) may soon fall to 45.00-60.00 dollars, StockCharts365.com believes.
The technical picture for the oil price now paints a gloomy picture for the oil price, which could fall all the way down to around 45.00 - 60.00 dollars during the next 1-2 years.
Technical Analysis of the Oil Price (Brent Spot)
Technical Analysis of the Oil Price (Brent Spot):
Over the past three years, the oil price has established a large head and shoulder formation (cf. chart here), and where a strong technical sell signal will be triggered by a break below the USD 80.00 and 75.00 level.
Over the past year, the oil price has now moved within a large symmetrical triangle consolidation formation (cf. chart).
The most common thing about such triangle consolidation formations is that the further development will follow in the same direction as the previous development.
Here for the oil price now (Brent Spot), this means that it is most likely that there will be a break down from the aforementioned consolidation formation, and a further decline in the oil price.
Furthermore, an upcoming movement will often have a roughly similar size to the previous movement before the consolidation, here for the oil price this is marked in the diagram with red dotted lines.
According to technical analysis, a drop in the oil price all the way down to around 45 dollars is now indicated, and such a break down from the aforementioned consolidation formation is likely to occur in the near future.
There are various technical support levels downwards, and the most important ones will first be around 70.00 dollars, and then around 57.00-60.00 dollars, and then around 45 dollars (cf. chart).
StockCharts365's own analysis model 'The SignalList' is now in a sell signal for the oil price (cf. chart).
Both according to the aforementioned large head and shoulders formation, and the large symmetrical triangle consolidation formation.
Yes, both of these formations indicate that in the event of a break below USD 80.00 and 75.00, a further decline towards USD 45.00 - 50.00 will be signalled.
What is needed to change the currently very negative technical picture for the oil price will be for it to break through and establish itself above a now very important technical resistance level around USD 88.00 - 90.00.
As the overall technical picture is today, a sharp drop in the oil price is indicated if it now breaks below a very important technical support level at USD 75.00 - 80.00.
It may of course seem extreme to think that the price of oil can drop completely from today's slightly over 80.00 dollars to around 45.00 dollars in the next 1-2 years.
If there's one thing we've all learned over the years when it comes to the price of oil, yes, it is true that it can fluctuate a lot and within a very short time.
The technical picture for the oil price as of today thus indicates that it may fall steeply and a lot over the next 1-2 years if it now breaks down from this large consolidation formation it has moved within the last year now.
If a break below the 80 dollar level soon occurs, then strong negative technical signals will be triggered for the further development going forward in the short and medium term for the oil price.
StockCharts365.com therefore believes that the oil price may face a sharp fall in both the short and medium term, and as the technical picture for the oil price now indicates.
An oil price between 45.00 and 60.00 dollars in a year's time does not seem improbable, as the technical picture for the oil price (Brent Spot) now indicates.
Feel free to also read a recent analysis of USD/NOK here recently, and it is not so difficult to imagine that this analysis can hit well if the oil price in a year's time is between 45 and 60 dollars.
You can read this case here:
NB! Remember to have read and understood the disclaimer.
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