Crude Oil Market As Oversold As 1999 Lows

Crude Oil is quite simply the most important commodity on the planet. But volatility with Crude Oil prices emerges every time there is conflict in oil producing nations or an economic slowdown.

And this has led to some pretty big swings in Crude Oil prices over the past several years.

But the latest swing lower is nearing a moment of truth. In fact, this decline may be the most important swing lower of the 2000’s.

Why?  Because oil prices are currently testing a key price support level comprised of the 2004 breakout level (above the 1990 highs) and the 2009 price lows – see red circles and line. In fact, this price support area also marks the 23.6 Fibonacci support level (from the 1999 lows to 2008 highs). AND crude oil is as oversold as it was back at the 1999 price lows.

But that’s not all. The price pattern on oil appears to form a bullish falling wedge that comes together at point (1). If the pattern fails here, then Oil may fall back into its prior price range of the 1980’s and 1990’s (below read line). That would also mean that the global economy is likely weaker than the Federal Reserve (or any of us) thinks… and perhaps a Fed rate hike in December would be premature.

On the flip side, if Crude Oil can stabilize within this price support area (between $35 and $45) and then break out above its steep declining trend line, it may be set for higher prices into 2016.

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The article was originally posted at See It Market.com

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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