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5 "Tells" that the Stock Markets Are About to Reverse

Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO

Commodities / Crude Oil Apr 20, 2018 - 08:24 AM GMT

By: Nadeem_Walayat

Commodities

The crude oil price started 2018 with a BANG rising from an opening $60 to a January peak of $67, a gain of 12% in less than 1 month! Whilst February saw the oil price give up all of Januarys gains by falling from $67 to $58 before recovering towards the top of the emerging $67 - $58 trading range.


The oil price trading range trend for March (inline with my last update) set the scene for the current rally that hit a 3 year high of $69.

Charts by stockcharts.com

Whilst my forecast for 2018 since the start of this year has been for the oil price to target a trend to $80.

Crude Oil Forecast 2018

01 Jan 2018 - Crude Oil Achieves $60 Forecast Expectations for 2017, $80 Next?

Oil is clearly in a bull market and thus I expect the bullish trend to continue and would not be surprised if we see crude oil break above $80 during the year!

With my last update of late February reaffirming my $80 target despite the then deep 15% drop, with my concluding expectations for the oil price to spend March within a tight trading range before resuming its trend higher.

Crude Oil Price Trend Forecast for March 2018

27 Feb 2018 - Crude Oil Price Trend Forecast for March 2018

CONCLUSION

Therefore the crude oil price appears likely to remain within a trading range for the next month or so with-in the high of $67 and a low of $58. Thus given that the oil price is currently at $64 is near resistant then the oil price should soon reverse lower to target $58 which is likely to be the trend for most of March 2018 before the next assault on the high as my longer term 2018 forecast for a $80 crude oil price remains in tact.

Crude Oil Price Technical Analysis

MACD is bullish and not overbought which is supportive of overall rising oil prices.

RESISTANCE is at previous major support at $90 which suggests oil price trend could continue higher towards that level.

SUPPORT is in the area $58 to $60, that should contain any brief reaction lower within the trading range.

TREND CHANNELS - The oil price has hit the upper end of its rising trend channel which suggests a reaction lower is likely. Also given the shallowness of the channel, then unless there is a major breakout higher then the oil price progress higher is likely to be slow.

ELLIOT WAVE - I count 5 minor waves off the $58 low, which suggests to expect an ABC correction that implies the oil price looks set to remain within its trading range for the next month or so before resuming its trend higher.

SEASONAL ANALYSIS - oil prices tend to rally into late summer and then fall into early winter. Which is supportive of a trend higher in oil prices into late August / Early September.

FUNDAMENTALS

ARAMCO - The Saudi government recently made it known that they wanted the oil price to rise to $80 so as to ensure a successful ARAMCO IPO this year. Whilst this has grabbed market attention. However, when one of the oil markets key player is attempting to pump the oil price higher so that they can dump ARAMCO stock, then that means they are eyeing the maximum possible price they can temporarily achieve, which implies significantly higher than $80. So the announcement may be for $80 however the objective is probably $100 as the difference between $60 and $100 could amount to as much as $1 trillion difference in ARAMCO's IPO valuation.

So expect the Saudi's to continue trying to manipulate the oil price higher both through Saudi oil supply and through their proxy wars in Syria and Yemen, which includes false flag operations such as the recent supposed missile attack on Riyadh, all of which are aimed towards boosting the oil price ahead of the ARAMCO IPO.

EIA reports US oil stockpiles falling towards the 5 year average of 430 million barrels, down form 540 millions barrels a year ago. So whilst not screaming bullish, nevertheless falling US stocks are supportive of oil prices.

FORECAST CONCLUSION

The crude oil price appears likely to remain within a trading range for the next month or so within the high of $69 and a low of $61. Whilst my 2018 forecast for a target high of $80 remains intact and which now looks set to be achieved between late August and early September. So I don't expect the Saudi's to get their $100 crude oil price to dump ARAMCO IPO stock on the market this year. Still if the Saudi's time it right they could sell ARAMCO stock whilst the crude oil price is trading near $80.

Ensure you are subscribed to my always free newsletter and youtube channel for my forthcoming in-depth analysis and detailed trend forecasts.

Source and comments: http://www.marketoracle.co.uk/Article62107.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2018 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Copyright © 2005-2018 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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