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Will Oil Trade Below $40 in 2017? Poll

Although crude oil does not pertain to the foreign exchange market, it is often traded by currency traders via CFDs provided by numerous retail Forex brokers. The last time WTI oil traded below $40 per barrel was on August 3, 2016, while the Brent crude reached that low back on April 8, 2016.

Both commodity benchmarks are trading in a clear downtrend in 2017 as indicated by the regression channels on the daily charts.

WTI

WTI - Linear Regression Channel on Daily Chart

Brent

Brent - Linear Regression Channel on Daily Chart

However, there is much doubt that the current trend can continue to sub-$40 levels considering two fundamental factors:

To get a better grasp on the technical picture, you can look at the weekly chart, which shows crude prices in a long-term uptrend starting in the beginning of 2016. The price of both blends still posts clear higher highs and higher lows on that timeframe.

WTI

WTI - Uptrend on Weekly Chart

Brent

Brent - Uptrend on Weekly Chart

My own prediction, which I had made in my 2017 forecast post, anticipated a rather strong growth of the crude prices to $60-$80 range this year. The optimism was based on the prospects for improved global economy growth rates and the agreement by the OPEC and several non-OPEC countries to cut the production. However, considering the shale oil extraction growth in the USA and additional output from Iraq and Iran, there is currently no supply-side bullish factor that would push the price up. Unless something unexpected happens, the oil (at least WTI) could easily decline to $40 per barrel by the end of the year, in my opinion. And what are your thoughts on this?

Note: There is a poll embedded within this post, please visit the site to participate in this post’s poll.

If you want to share a detailed opinion or analysis piece on the course of the oil price during the second half of 2017, please do not hesitate to post a commentary via the form below.

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About Louie Lewis

Louie Lewis
Successful forex trading starts with you first. Then comes the actual strategies and techniques. I have been involved with forex and forex trading for a few years now. It is a wonderful way to build wealth. The learning never stops and I want to help others along their journey into this wonderful market of opportunity.

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