Oil is likely headed to $70 per barrel in 2024

For the past four trading sessions, West Texas Intermediate crude oil oscillated between $83 and $85 per barrel. At the moment, it trades near the lower end of this range, and technical indicators on the daily chart continue to grow bearish; the same applies to technicals on the weekly graph. As a result, the likelihood of oil slumping below $80 in the short/medium term increases. This view is also supported by the weakening global economy and the latest data (preliminary) from Saudi Arabia (the world’s second-largest oil producer), which revealed the country’s economy shrank by 4.5% YoY in the third quarter of 2023 (the oil activities declined by 17.3%, while non-oil and government activities rose 3.6% and 1.9% respectively). Unless there is any significant disruption to the supply in the Middle East amid the Israel-Hamas War, we believe the crude oil is headed lower. With that said, we want to set our price target to $80 per barrel in the short/medium term and next year’s price target to $70 per barrel.

Illustration 1.01

Illustration 1.01 displays the daily chart of USOIL. The yellow arrow indicates a bearish crossover, confirming the trend reversal.

Technical analysis
Daily time frame = Bearish
Weekly time frame = Slightly bearish

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DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

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Our price target of $80 was hit.