FinancialMarkets Forex Trading Strategies 3 : Oil Long Term down to $40-$50 range?
Something crazy is going on with Oil.
We are seeing a long term wedge being established.
Zooming in at the top end, we will see that Brent is likely to correct down to near 70 before going back up to 80.
However from around the $80, (possibly at most 90), we could see a big long term downward correction down to around $40-$50 range.
But the question is what could bring oil down so dramatically?
Could it be the sudden restart of world economies is temporary, rather like starting a cars engine where it consumes quite a bit of oil?
Could it be Covid all over again – another major variant? Some kind of backfire on vaccines? Something bioligical that would oblige economies to close again? Such an episode could cause the double dip recession that analysts spoke about a year ago – which apparently didn’t happen – BUT yet to happen?
Time will tell, this is a long shot, so we will revisit this in the coming months.
Oil
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