Oil Is Holding Its Ground Amid a Shaky Economy

On April 2, the Organization of the Petroleum Exporting Countries (OPEC+) stunned markets…

In the face of an inflation-ridden global economy, OPEC+ announced further oil production cuts of 1.16 million barrels a day.

Immediately, oil surged on this news. Prices rose from $75.67 to $81.69, marking an incredible 8% increase.

It’s not uncommon for news-related market moves to quickly give back their gains. But oil has held its ground so far, and it’s now been several days since the OPEC+ announcement.

In fact, my analysis shows me oil prices will likely go higher in the short-term. A bullish chart pattern I’ve been tracking is now complete.

And if I’m correct, prices will even breach the major price level of $100 by summer.

Let’s take a look at oil’s chart to see the pattern and short-term target I’ve identified…

(Click here to expand image)

The blue trendlines on the chart highlight a falling wedge pattern. These patterns belong to a family of chart setups known as reversal patterns.

Once a falling wedge completes, prices typically break out substantially higher. This falling wedge completed on April 12 when prices broke through my key level of $81.64 (red line).

My initial upside target for this pattern is the upper base of the wedge, which comes in at $92.50. Back in October 2022, crude oil reached this level and made a double top a month later.

However, it was unable to break above $92.50 in November and instead broke down hard. Eventually, oil reached its March 2023 low of $66.93.

But markets have long memories… the $92.50 price level should serve as stiff resistance. Then oil will likely pull back after reaching this target.

Despite this, I believe oil has ended a bear market cycle and is getting ready to march toward triple-digit prices once again.

Due to its high volatility, the crude oil market is always on my watchlist. As soon as I see the next development, I’ll make sure to keep you updated.

Happy trading,

Imre Gams
Analyst, Market Minute

P.S. Readers know I believe forex is one of the most exciting and profitable trading opportunities out there. I’ve been using it to help bring you regular gains since I launched my own currency service last year. That’s why I want to put an upcoming event on your radar…

My colleague Larry Benedict is another forex expert, and he’s been operating in the currency market since the ’80s. He’s traded more than $500 billion worth of currencies over his career – including while running his hedge fund that went 20 years without a losing year.

On April 19, he’s holding a“Currencies in Crisis” Summit to share his top way to trade forex right now. If you’re interested in learning from his experience, you can RSVP to his summit for free right here.

What are your predictions for oil over the next five months?

Let us know your thoughts – and any questions you have – at [email protected].