WTI Crude Oil’s (USO) Chart Looks Weak
$OIL, $USO
WTI Crude Oil is displaying a Bearish Engulfing Candle on the daily, and a drop to 40 looks imminent in here.
And if WTI Crude Oil falls to 40 there is nothing to suggest it will not fall further.
In fact, some of the potential buyers will be very disappointed by the lack of follow-through in buying interest around the $42 handle, this bunch of speculators may then join the Bears and help push prices towards the mid-30’s, with the 127.2% Fibo extension of the corrective up move in March, coming in at 36.45.
The more significant 161.8% Fibo extension mark of that swing is seen at 29.35, which is below the next major psych mark at 30.
That being the case, Crude Oil prices being very oversold, things could get even worse for the Bulls. Only when Crude Oil breaks out of its Bearish channel can the Bulls start feeling confident about a recovery in the energy component.
Until that occurs, the path of least Resistance continues to the Southside.
| HeffX-LTN Analysis for USO: | Overall | Short | Intermediate | Long |
| Bearish (-0.41) | Very Bearish (-0.53) | Very Bearish (-0.55) | Neutral (-0.14) |
Crude Oil has fallen this year even US gasoline demand expanded, stimulated by a growing economy and low prices. Total gasoline supplied to the US market rose to an 8-yr high of 9.7-M BPD last month, according to US Department of Energy data.
Crude Oil could fall to 10 bbl as the Organization of Petroleum Exporting Countries (OPEC) engages in a “Price War” with rival producers, testing who will cut output 1st.
OPEC is saying we are not going to cut production, we are going to see who can stand lower prices longest, since October of 2014 HeffX-LTN sees that Crude Oil is likely is headed for 20 – 22 bbl.
Stay tuned…
HeffX-LTN
Paul Ebeling
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