Amidst Collapsing Pivotal Technical Support, Crude Oil Prices Plunge in the Forecast

7 December 2023, Thursday
Amidst Collapsing Pivotal Technical Support, Crude Oil Prices Plunge in the Forecast

Why Crude Oil Prices Are Dropping?

 

Crude oil prices are going down

 

Crude oil prices, which are measured by WTI futures, have been falling a lot lately. In fact, they have been dropping for four days in a row and are now at the lowest level since late June. Today, the prices fell by about 4%, which means that in December alone, the prices have lost almost 9% of their value. This is not good news for oil.

 

Why are oil prices dropping?

 

There are a few reasons why oil prices are going down. One reason is that OPEC+ (a group of oil-producing countries) announced that they will be cutting the supply of oil. But the problem is that these cuts are voluntary, which means that some countries might not actually follow through with them. This has made investors worried.

 

Another reason is that China, which is a big consumer of oil, is not growing as much as people expected. At the same time, the United States is producing a lot of oil, but the economy is slowing down. This means that there is too much oil and not enough demand for it. When there is too much of something and not enough people want it, the price goes down.

 

There are also some people who are making big bets on the price of oil. These people are called CTAs, and they tend to follow trends. Right now, they are betting that the price of oil will keep going down. This is making the price of oil even more unstable and causing it to drop even more.

 

What will happen next?

 

The future of oil prices depends on how the U.S. economy is doing. If the economy starts to get worse and a recession happens, then the prices of oil could stay low or even go lower. On the other hand, if things start to get better, the prices could go up again.

 

If the prices do start to go up, there will be a point where they might stop going up and start going down again. This point is called resistance. Right now, the resistance is around $70.00. If the prices go above this point and stay there, then more people might start buying oil and the prices could go up even more.

 

But if the prices keep going up, there will be another point where they might stop going up and start going down again. This point is called the next bearish zone of interest, and it is at $67.00. If the prices go below this point, then things might not be looking good for oil.

 

So, we will have to wait and see what happens with oil prices. They could go up or they could go down. It all depends on what happens with the economy and how people are feeling about oil.