- Summary:
- Crude oil price remains bid on every dip. It formed a double bottom and threatens to move above $45 on hurricane Delta threats.
The crude oil price bounced nicely lately, albeit on the lower timeframes. A close look at the bigger timeframes reveals that the market sits in a tight range for several months now.
However, on the lower timeframes, it found bids on every single dip so far. Moreover, on the hourly chart, it has formed a double bottom – a bullish pattern with a measured move pointing to the crude oil price regaining the $45 level.
Hurricane Delta Threatens the Gulf of Mexico
The National Hurricane Center (NHC) issued advisories for the Atlantic on hurricane Delta. As it moves Northwestward over the Gulf of Mexico, the hurricane is responsible for the shutting of many of oil facilities in the United States oil-producing regions.
The cut in production will further affect the demand and supply imbalances, in a market that already shows signs of undersupply heading into the end of the year. Moreover, the recent strike in Norway’s Nord See affects production levels by some 300k bpd, contributing to the bid tone in the crude oil price.
Crude Oil Double Bottom
The $40 level remains determinant for the medium-term evolution of the crude oil price. It acted as resistance for the entire summer, and now the market prepares to break higher.
On the recent rejection, the price of oil formed a reversal pattern around the $36.50 level. The quick rebound on the second attempt at the area suggests that the price of oil has the strength to go for the measured move.
In doing so, it will break well above the $40 level, having great chances to close the year above. Bulls may want to go long at the market and place a stop-loss at $37.50 while aiming for the measured move around $45. Conservative traders could also consider booking half the profits by the time the crude oil price exceeds $42.
Crude Oil Price Forecast
