27-Jul-22
Near term futures: Brent 105.30, Nymex WTI 95.97
In our Jul-22 report (27-Jun-22, Brent $113.66) we were looking at two possibilities for the near term:
a) A bounce from $105-107 to rise to $125 and eventually break higher towards $135-140 over the coming months or
b) A fall below $105/102 while price remains below $125 to fall eventually towards $85 in the next 2-4 months.
Of these, the second possibility seems to be working out so far, breaking below $102 in July-22 to a low of $94.50 so far.
EXECUTIVE SUMMARY
Brent has remained below $125 and fallen in line with the Possibility B mentioned in our July-22 report. A maximum possible fall to $85 is possible before a bounce back towards $115 or higher can be seen in the medium term. We also consider a possible extended sideways range of $125-85 to hold for the next few quarters.
A-B-C CORRECTION: CAN IT TARGET $85?
Brent has remained well below $125 and has tested $94.50 before bouncing a bit from there. Now while below $110, there can be scope for the price to fall back towards $90-85 in the coming weeks before a sharper bounce can be expected towards $110/115 and higher in the longer run.
In our July report, we had mentioned the possibility of an A-B-C correction to have begun from $139.13 (seen in Mar-22). This seems to have been validated on a fall below $115 in July. The correction can target $90/85 before a bounce is seen in the medium term.
That said, we are not looking for a fall below $85. Any such fall below $85 would be a surprise and force us to revisit our projections (less likely).
To buy a single copy or subscribe for a year please click on the link: https://kshitij.com/crude-oil-forecast