Oil prices have rebounded from their recent lows and hopefully the worst is now over. The oil market appears like it may have already turned the corner. Perhaps we are in the inflection right now as we speak.

Prices recovered faster than many were forecasting due to lower-than-expected supply coupled with better-than-expected demand.

Data from the United States Energy Information Administration on Wednesday showed that the United States production is now 1.5 million barrels per day below its March all-time high level of 13.1 million BPD.

Beginning May 1, OPEC and its oil-producing allies took 9.7 million BPD offline, and on this past Monday Saudi Arabia, the group’s leader, said it would scale back production further in an effort to boost prices. The EIA’s data also showed that gasoline demand is beginning to recover as states start to ease shelter-in-place restrictions.

In April, May’s expiring West Texas Intermediate crude oil contract plunged below zero and into negative territory for the first time on record, but prices have since recovered and on Thursday the contract for June delivery traded around $26. Brent crude, the international benchmark, traded around $30.

By the end of 2021, WTI could be trading as high as $60, and Brent as high as $65, but there is some caution warranted. In order for the market to rebalance there needs to be a continued drawdown in inventories, and the production that has already come offline needs to stay offline for at least a sustainable period of time.

As we emerged from lockdown we got an immediate pop exhibited in this week’s trading.

Despite WTI’s rebound, prices are still about 60% below the January high level of the mid $65.00 price area, which has pressured producers as companies struggle to break even. Once demand catches up and producers look to adding supply again, access to capital markets will likely be limited.

Most investors have had enough of the energy sector. They already had enough going into this, and if they hadn’t had enough before they’re unlikely to be interested this time around. What that tells you, when they need to grow production they’re going to have to grow it out of cash flow, which means we’re going to see higher prices in the pipeline.

YEARLY Crude Oil Cycles

• The 10 year cycle makes a high on May 3 and then sells off sharply into May 25 after which it rallies from a major low.
• The 20 year cycle rallies sharply into May 19 then trades sideways into month end.
• The 30 year cycle rallies into May 14 then sells off into the end of the month.
• The 10 and 30 year cycles both head down from the 14th May.

Key turning point dates:

• May 4
• May 18
• May 29

MONTHLY Crude Oil Outlook ( JULY – CLN20 )

The mid $12.00 price area can absorb annual selling pressures. Above the $29.00 price area remains a near term target. Potentially the mid $55.00 price area is in reach over the next several months.

Bullish Outlook:

The $29.00 price area can likely absorb buying pressure throughout the balance of May. Once tested, the market is susceptible to falling back to key support at the mid $12.00 price area within several weeks.

On the other hand, a daily settlement above the $29.00 price area indicates a good annual low has been made. A daily settlement above the $41.00 price area would then be expected within several weeks and then the mid $55.00 price area would be attainable within several months, likely making the high for the remainder of the year.

Bearish Outlook:

A weekly settlement below the mid $12.00 price area would likely yield a $5.00 price area retest within several weeks, the lowest price support presently found on any chart without revisiting negative price territories.

WEEKLY Crude Oil Outlook ( JUNE – CLM20 )

The main trend is bearish according to the weekly swing chart, but the closing price reversal bottom from the week ending May 1 and its subsequent confirmation, helped shift momentum to the upside.

The actual main trend will change to bullish on a trade through the last main bottom at $54.86. This is highly unlikely, however, there is room to the upside for the market to complete a normal 50% to 61.8% retracement.

A trade through $17.27 will negate the closing price reversal bottom and signal a resumption of the bearish trend.

The minor trend is also bearish. A trade through $35.18 will change the minor trend to bullish. This will confirm the shift in momentum to bullish. The minor range is $37.64 to $17.27. Its 50% level at $27.46 is providing resistance. This price level is also controlling the short-term direction of the market.

The short-term range is $54.86 to $17.27. Its 50% level at $36.07 is the next potential upside target. The main range at $40.11 to $45.50 is the major upside target.

Weekly Forecast

Based on last week’s price action, the direction of the July WTI crude oil market the week-ending May 15 is likely to be determined by a downtrending Gann angle at $26.95.

Bullish Scenario

A sustained move over $26.95 will indicate the presence of buyers. This could lead to a labored rally with targets including a 50% level at $27.46, followed by another downtrending Gann angle at $30.86. This is a potential trigger point for an acceleration to the upside with the next target a 50% level at $36.07.

Bearish Scenario

A sustained move under $26.95 will signal the presence of sellers. The first target is a minor pivot at $22.93, followed by the reversal bottom at $17.27.

Technical Outlook

In order to generate the momentum needed to drive this market away from the late April bottom, the buying is going to have to be strong enough to overcome the pair of downtrending Gann angles at $26.95 and $30.86.

Want to learn more about how Hawkeye can help you spot opportunities in the oil market? Tap here to view a no-cost presentation right now!

The markets have been rallying for two weeks as investors have keyed in on signs of a slowdown in production and the easing of coronavirus-related restrictions across the globe. Back-to-back smaller than expected crude oil inventory builds have been supportive, but the rise in distillate stockpiles offset that news.

Positive geopolitical developments could be the bullish wildcard next week. On Friday, the markets garnered a little support after United States and Chinese officials discussed a trade deal agreed before the coronavirus outbreak, with both sides agreeing to implement the agreement.

We’re seeing a lot of short-covering, but traders have been reluctant to go long given the bearish fundamentals. This may change if prices pullback into a value area. Furthermore, traders are not going to gain confidence in playing the long side until they start to see that the attempts to reopen the economy are proving to be successful.

Despite the recent strength, traders should continue to look for heightened volatility and the possibility of a wicked two-sided trade as some momentum traders get bullish on the easing of restrictions and some turn bearish again as inventories continue to build.

The assumptions on the supply side that are driving prices higher right now are certainly supported by data. There has already been a massive decline in the rig count, taking the number of active rigs in America to new lows. That has a big impact on where we will be in the future, but unless there is enough demand to eat into the existing glut, that won’t make much difference to the short-term storage issue.

On the demand side, things aren’t as clear-cut. I hope and pray that things go smoothly as some states begin to reopen, but there is a chance that it is just too soon. If so and coronavirus cases spike, that anticipation of big increases in demand disappears and oil will likely collapse again. Even if the worst-case scenario doesn’t unfold though, reopening is a gradual process and it is hard to imagine that gasoline demand will be robust enough initially to allow for a further jump in crude over the next several weeks. Retail gasoline sales while better than they were, remain weak.

YEARLY Crude Oil Cycles

• The 10 year cycle makes a high on May 3 and then sells off sharply into May 25 after which it rallies from a major low
• The 20 year cycle rallies sharply into May 19 then trades sideways into month end.
• The 30 year cycle rallies into May 14 then sells off into the end of the month.
• The 10 and 30 year cycles both head down from the 14th May.

Key turning point dates:

• May 4
• May 18
• May 29

MONTHLY Crude Oil Outlook ( JULY – CLN20 )

The $13.00 price area can absorb annual selling pressures. Above the mid $29.00 price area remains a several week target. Potentially the mid $55.00 price area is in reach over the next several months.

Bullish Outlook:

The mid $29.00 price area can likely absorb buying pressure throughout the balance of May. Once tested, the market is susceptible to falling back to key support at the $13.00 price area within several weeks.

On the other hand, a daily settlement above the mid $29.00 price area indicates a good annual low has been made. Then the mid $41.00 price area would be expected within several weeks and the mid $55.00 price area then attainable within several months, likely making the high for the remainder of the year.

Bearish Outlook:

A weekly settlement below the $13.00 price area would likely yield a $5.00 price area retest within several weeks, the lowest price support presently found on any chart without revisiting negative price territories.

WEEKLY Crude Oil Outlook ( JULY – CLM20 )

The main trend is bearish according to the weekly swing chart, but the closing price reversal bottom from the week ending May 1 and its subsequent confirmation, helped shift momentum to the upside.

The actual main trend will change to bullish on a trade through the last main bottom at $54.86. This is highly unlikely, however, there is room to the upside for the market to complete a normal 50% to 61.8% retracement.

A trade through $17.27 will negate the closing price reversal bottom and signal a resumption of the bearish trend.

The minor trend is also bearish. A trade through $35.18 will change the minor trend to bullish. This will confirm the shift in momentum to bullish. The minor range is $37.64 to $17.27. Its 50% level at $27.46 is providing resistance. This price level is also controlling the short-term direction of the market.

The short-term range is $54.86 to $17.27. Its 50% level at $36.07 is the next potential upside target. The main range at $40.11 to $45.50 is the major upside target.

Weekly Forecast

Based on last week’s price action, the direction of the July WTI crude oil market the week-ending May 15 is likely to be determined by a downtrending Gann angle at $26.95.

Bullish Scenario

A sustained move over $26.95 will indicate the presence of buyers. This could lead to a labored rally with targets including a 50% level at $27.46, followed by another downtrending Gann angle at $30.86. This is a potential trigger point for an acceleration to the upside with the next target a 50% level at $36.07.

Bearish Scenario

A sustained move under $26.95 will signal the presence of sellers. The first target is a minor pivot at $22.93, followed by the reversal bottom at $17.27.

Technical Outlook

In order to generate the momentum needed to drive this market away from the late April bottom, the buying is going to have to be strong enough to overcome the pair of downtrending Gann angles at $26.95 and $30.86.

Want to learn more about how Hawkeye can help you spot opportunities in the oil market? Tap here to view a no-cost presentation right now!

Oil prices traded in positive territory on Thursday, but retreated from session highs during afternoon trading.

Several bullish factors supported prices, including United States companies cutting production, Saudi Arabia raising their official oil selling price and gasoline demand improving as economies around the world begin to start the reopening process.

WTI – CLM20, the United States benchmark, gained 1.5%, or 36 cents, to trade at $24.26 per barrel.

Earlier in Thursday’s session WTI had been up more than 11%, hitting a session high of $26.74.

This week, WTI has gained more than 27%, putting it on pace for one of its best weeks on record going back to the contract’s inception in 1983.

Of course, given the more than 50% decline this year a smaller move now accounts for a significantly larger percentage change.

Data from the Energy Information Administration showed that for the week ending May 1 production declined by 200,000 barrels per day to 11.9M BPD, which is more than 1M BPD below March’s record high.

Exxon, Chevron and ConocoPhillips are among the companies that have cut production in the face of depressed prices.

While inventory in the United States is still rising, it’s now at a slower pace.

Last week, stockpiles grew by 4.6M Barrels, which was smaller than the 8.67M Barrels build analysts had been expecting.

While the demand for gasoline is still well below its highs, government data showed that it is starting to turn a corner as states start to open up their economies.

All eyes were on yesterday morning’s Unemployment Claims Report.

With now 33.5+ Million Americans put on unemployment within the last 7 weeks, and countless people who have been unable to successfully file, things to come remain rather grim looking.

So the question is … Is this rally overdone?

Given WTI’s nearly 40% gain this month, some say the rally is overdone, especially as storage around the world continues to fill.

Looking forward to June’s contract expiration may likely cause some anxiety in the market after what transpired last month when May’s contract expiration traded negative.

Time will tell as it always does!

YEARLY Crude Oil Cycles

• The 10 year cycle makes a high on May 3 and then sells off sharply into May 25 after which it rallies from a major low.
• The 20 year cycle rallies sharply into May 19 then trades sideways into month end.
• The 30 year cycle rallies into May 14 then sells off into the end of the month.
• The 10 and 30 year cycles both head down from the 14th May.

Key turning point dates:

• May 4
• May 18
• May 29

MONTHLY Crude Oil Outlook ( JULY – CLN20 )

The mid $13.00 price area can absorb annual selling pressures. Above the $30.00 price area remains a several week target. Potentially the 57.00 price area is in reach over the next several months.

Bullish Outlook:

The $30.00 price area can likely absorb buying pressure throughout the balance of May. Once tested, the market is susceptible to falling back to key support at the mid $13.00 price area within several weeks.

On the other hand, a daily settlement above the $30.00 price area indicates a good annual low has been made. Then the $42.00 price area would be expected within several weeks and the $57.00 price area then attainable within several months, then likely making the high for the remainder of the year.

Bearish Outlook:

A weekly settlement below mid $13.00 price area would likely yield a $5.00 price area retest within several weeks, the lowest price support presently found on any chart without revisiting negative price territories.

WEEKLY Crude Oil Outlook ( JUNE – CLM20 )

The main trend remains bearish according to the weekly swing chart. The market isn’t close to turning the main trend to bullish, but there is room for a normal 50% to 61.80% retracement. A trade through $6.50 will signal a resumption of the downtrend.

Based on last week’s price action, the direction of the June WTI crude oil market for this week-ending May 8 is likely to be determined by trader’s reaction to the pivot at the $20.00 price area.

Watch the price action and read the order flow at the $20.00 price area all week. Trader’s reaction to this level will set the tone. The market could get bullish over the $20.00 price area and bearish under the $11.00 price area

Bullish Scenario

A sustained move over the $20.00 price area will indicate the bulls are getting stronger. If this move is able to generate enough upside momentum then look for the rally to possibly extend into the resistance cluster at the $30.00 price area.

Bearish Scenario

A sustained move under the $20.00 price area will signal the presence of bears. The first downside target is a steep downtrending angle at the $11.00 price area. Crossing to the weak side of this angle will put the market in a bearish position with the next target the $6.50 price area.

Want to learn more about how Hawkeye can help you spot opportunities in the oil market? Tap here to view a no-cost presentation right now!

United States West Texas Intermediate Crude Oil Futures were up for a third straight session when closing out last week’s trading activity as major producers began output cuts to offset a slump in fuel demand triggered by the coronavirus pandemic, while reported data showed United States Crude Inventories grew less than expected.

Futures prices are now within striking distance of the close on April 20 which is the day before the steep drop that saw nearby May futures plunging into negative territory for the first time in history. This move would diminish the impact of the historic break in crude oil just two weeks ago.

OPEC+ Production Cuts Began

Reflecting the output cuts agreed between OPEC and other major producers like Russia, a grouping known as OPEC+, the imbalance between oil supply and demand is set to be halved to 13.6 million barrels per day (BPD) in May, and drop further to 6.1 million BPD in June.

U.S. Firms Cutting Production

Traders are saying production cuts of almost 10 million bpd by OPEC and it’s allies or about 10% of global production, which is due to take effect from May 1, are not going to have that much of an impact on prices without the United States curbing its own output.

While storage is rapidly filling up, production cuts by U.S. shale producers, are estimated at 300,000 BPD for May and June, should help slow the flow of excessive inventory into the reserve tanks.

Additionally, regulators in the U.S. state of Texas, the country’s biggest oil producer, will hold a vote on May 5 on whether to enact output curtailments. Officials in the states of North Dakota and Oklahoma are also examining ways to legally allow output cuts.

Oversupply Concerns Dampened

Storage concerns continue to weigh on markets with the International Energy Agency (IEA) warning that global capacity could reach its maximum by mid-June and that energy demand could slump by a record 6% in 2020 due to lockdowns. Nevertheless, WTI and Brent crude oil are rallying because of an easing of worries over rising United States stockpiles.

It started late Tuesday last week with the release of the American Petroleum Institute (API) weekly inventories report that showed a smaller than expected build, and continued on Wednesday when the United States Energy Information Administration (EIA) reported numbers below forecasts.

According to the EIA, United States crude inventories grew by 9 million barrels last week to 527.6 million barrels, well below the 10.4 million-barrel rise analysts had expected.

United States gasoline stockpiles fell by 3.7 million barrels from record highs the previous week, with a slight rise in fuel demand offsetting a rebound in refinery output.

Demand Destruction Will Continue to Weigh on Prices

Prices are likely to fall further this year even as countries begin to ease restrictions imposed to counter the viral outbreak and the output cuts by big producers will not fix the supply glut.

The estimated shortfall this year is expected to be about 30 million BPD of demand. The impact of the coronavirus pandemic has obliterated demand with much of the world’s population still under some form of economic and/or social lockdown.

Short-Term Outlook

Gains are likely to be capped and selling pressure may resume over the short-run since the 30 million BPD plunge in demand is three times the size of the OPEC+ output cuts.

Prices could remain underpinned over the near-term, however, because of signs of a tightening of United States supply. Bullish traders and domestic oil companies are hoping this develops into a worthy trend. Nonetheless, industry professionals would like to see more aggressive cuts in production by United States producers.

What we’re seeing in the futures market is most likely profit-taking and light short-covering. Storage capacity is getting close to overflowing, but at a slower speed so short-sellers are merely making adjustments.

The smaller inventory builds should be noted but we’re going to need to see a continuation of this trend in the coming weeks to suggest the worst might be behind us. However, the reality is the already-stretched storage capacity is getting fuller and fuller every week, a rise in prices cannot be sustainable for long as the problem is still far from being resolved.

YEARLY Crude Oil Cycles

• The 10 year cycle makes a high on May 3 and then sells off sharply into May 25 after which it rallies from a major low.
• The 20 year cycle rallies sharply into May 19 then trades sideways into month end.
• The 30 year cycle rallies into May 14 then sells off into the end of the month.
• The 10 and 30 year cycles both head down from the 14th May.

Key turning point dates:

• May 4
• May 18
• May 29

MONTHLY Crude Oil Outlook ( JULY – CLN20 )

The mid $14.00 price area can absorb annual selling pressures. Above the $31.00 price area remains a several week target. Potentially the 57.00 price area is in reach over the next 3-5 months.

Bullish Outlook:

The $31.00 price area can likely absorb buying pressure throughout the balance of May. Once tested, the market is susceptible to falling back to key support at the mid $14.00 price area within several weeks.

On the other hand, a daily settlement above the $31.00 price area indicates a good annual low has been made. Then the $43.00 price area would be expected within several weeks and the $57.00 price area then attainable within several months, likely the high for the year.

Bearish Outlook:

A weekly settlement below mid $14.00 price area would likely yield a $5.00 price area retest within several weeks, the lowest price support presently found on any chart without revisiting negative price territories.

WEEKLY Crude Oil Outlook ( JUNE – CLM20 )

The main trend remains bearish according to the weekly swing chart. The market isn’t close to turning the main trend to bullish, but there is room for a normal 50% to 60% retracement. A trade through $6.50 will signal a resumption of the downtrend.

Based on last week’s price action, the direction of the June WTI crude oil market for this week-ending May 8 is likely to be determined by trader’s reaction to the pivot at the $20.00 price area.

Watch the price action and read the order flow at the $20.00 price area all week. Trader’s reaction to this level will set the tone. The market could get bullish over the $20.00 price area and bearish under the $11.00 price area.

Bullish Scenario

A sustained move over the $20.00 price area will indicate the bulls are getting stronger. If this move is able to generate enough upside momentum then look for the rally to possibly extend into the resistance cluster at the $30.00 price area.

Bearish Scenario

A sustained move under the $20.00 price area will signal the presence of bears. The first downside target is a steep downtrending angle at the $11.00 price area. Crossing to the weak side of this angle will put the market in a bearish position with the next target the $6.50 price area.

Want to learn more about how Hawkeye can help you spot opportunities in the oil market? Tap here to view a no-cost presentation right now!

Oil and gas exploration and production companies are slated to lose a staggering $1 trillion in revenues in 2020. The industry, which includes oil majors, made $2.47 trillion in revenues globally last year. But this year it’s projected to bring in $1.47 trillion, reflecting a 40% decline year-on-year.

This comes as the coronavirus pandemic and ensuing lockdowns cripple demand and force companies to slash spending and cancel projects. Before the virus began to hit economies, revenues for 2020 were expected to reach $2.35 trillion. Returns for 2021 are now also projected lower, at $1.79 trillion compared to a forecast of $2.52 trillion before the pandemic.

Crude Oil Inventories reported on Wednesday rose LESS THAN forecasted. A 9M Barrel build as opposed to a predicted 11.2M Barrel build. This, in conjunction with the talks of a soft reopenings for economies around the world and the OPEC+ deal cuts going into effect May 1, prices have started to rally

Jobless claims continue to rise. New claims reached 3.84 million last week, bringing the total to 30.3 million for the last six weeks. The number of total claims makes this the worst unemployment crisis in United States history. The greatest consumers in the world are jobless and confined. To see these weekly jobless claims begin to reverse would give crude oil a great boost!

CLM20 has been Blacklisted, I spoke with TradeStation to try to get some clarification as to when client’s will be able to trade the front month CL contract again – the June CLM20 Contract has been blacklisted due to last week’s little adventure into the negatives. The July contract CLN20 is able to be traded today and as long as the market remains stable moving forward it will be able to be traded as the “front month” after the June contract expires.

Long-Term MONTHLY Price Outlook

The $12.00 price area can potentially absorb annual selling pressure, above which the mid $29.00 price area remains a several week target, the $57.00 price area is potentially in reach over the next several months.

Upside, the mid $29.00 price area can absorb buying pressure through the remaining May trading sessions, with a daily settlement above the mid $29.00 price area indicating a good annual low has been placed.

The $57.00 price area then becomes a several month target where the broader market can potentially place this calendar year’s high.

Downside, a daily settlement below the $12.00 price area will most likely yield a single digit or even a potentially negative price area retest within several days to follow.

Mid – Term WEEKLY Price Outlook … 4 / 27 – 5 / 1

The main trend remains bearish according to the weekly swing chart.

A trade through the $6.00 price area will signal a resumption of the downtrend.

The main trend will change to bullish on a trade through the last main top at the $55.00 price area. However, this is extremely unlikely.

The minor trade range is between the $34.00 price area to $6.00 price area.

It’s 50% level or pivot point is at the $20.00 price area.

The short-term trade range is between the $55.00 price area to the $6.00 price area.

It’s 50% level comes in at the $31.00 price area.

The main trade range is the $64.00 price area to $6.00 price area.

It’s 50% to 60% retracement zone which is between the $35.00 price area and the $42.00 price area serves as a major price resistance.

Weekly Technical Forecast

Based on last week’s price action, the direction of the June WTI crude oil futures contract for the week-ending May 1 is likely to be determined by trader reaction to a downtrending angle at the $15.00 price area.

Weekly Bullish Scenario

A sustained move over the $15.00 price area will indicate the presence of buyers.

If this move creates enough upside momentum then look for a surge into the minor pivot at the $20.00 price area.

Since the main trend remains bearish, sellers are likely to come in on the first test of this level.

In attempts of the bears trying to overtake it, could potentially trigger an acceleration to the upside with the next major target coming in at the $31.00 price area.

Weekly Bearish Scenario

A sustained move under the $15.00 price area will signal the strong return of sellers.

The daily chart indicates there is plenty of room to the downside with the next downtrending target angle coming in at negative price areas.

Short – Term DAILY Price Outlook … May 1, 2020

For Friday, the $12.00 price area remains a long-term support level that can absorb not only daily selling, but also selling pressure throughout the balance of May’s trading activity as long as the market continues placing weekly and monthly settlements above the $12.00 price area.

The next several weeks are likely to yield an upside potential of testing the $30.00 price area.

Upside today, the $19.00 price area most likely contains initial strength, beyond which the $24.00 price area is able to contain the balance of the session’s strength.

A settlement today above the $24.00 price area indicates potentially reaching the $30.00 price area within several days.

Downside today, a weekly settlement below the $12.00 price area allows a further fall to the single digit price area within days.

Want to learn more about how Hawkeye can help you spot opportunities in the oil market? Tap here to view a no-cost presentation right now!

The late-week rally we experienced last week was likely being fueled by short-covering rather than speculative buying.

Nothing has changed in the fundamentals to turn the energy complex bullish in the last several days.

Oil remains under pressure and will continue to be for a little while, as world economies are attempting to reopen very slowly in the United States and Western Europe, although resumption in China still remains further down the line.

With May 1 approaching fast, the big question is how will the supply side deliver?

Prices could continue to firm up for this week if more OPEC+ members announce early production cuts.

An escalation of military activity in the Middle East would also be a driving factor for high prices.

However, the wildcard will be the announcement of oil output cuts made by the United States oil producers.

This news could potentially trigger a steep short-covering rally.

The demand destruction is expected to continue, but may slow down a bit if the COVID-19 curve continues to flatten.

Once the coronavirus is under control, output should rebound as well as prices, but don’t expect output or prices to return to pre-virus levels for quite some time.

Rising Tensions In The Middle East Threaten Supplies

After June futures hit $6.50 per barrel and the nearby futures contract went off the board, prices rose in reaction to an announcement from President Donald Trump in which he instructed the United States Navy to fire on any Iranian ships that harass them in the Gulf, although he added later he was not changing the military’s rules of engagement.

This ratchets up tensions once again between the United States and Iran.

However, given the glut we have in the oil market, it is difficult to see this offering lasting support to the market, unless the situation does escalate further.

From A Purely Technical Perspective…

Look out for a strong bullish upside bias to develop on a sustained move above the $20.00 price area…

And look out for a strong bearish downside bias to continue on a sustained move below the $15.00 price area.

April Crude Oil YEARLY Cycles

• The 10 year cycle makes a high on April 15, then pulls back into April 19 then makes a major top on May 2.
• The 20 year cycle makes a major low on April 11 then rallies into the April 25.
• The 30 year cycle continues its sell off into April 18 then rallies into the end of the month.

April is the second most bullish month of the year for crude oil.

With that said, there’s really no clear correlation to support that statement.

But, there is a seasonal tendency for oil prices to rally during the latter part of this month.

Key turning point dates:

• April 3
• April 16 to 17 – close to 10 and 30 year cycles
• April 23 to 24 – close to 20 year cycle

Long-Term MONTHLY Price Outlook

The $12.00 price area can potentially absorb annual selling pressure, above which the $30.00 price area remains a several week target, the $57.00 price area is potentially in reach over the next several months.

Upside, the $30.00 price area can absorb buying pressure through May trading sessions, a daily settlement above the $30.00 price area indicates a good annual low has been placed.

Then the $57.00 price area becomes a several month target where the broader market can potentially place this calendar year’s high.

Downside, a daily settlement below the $12.00 price area will most likely yield a $1.00 price area test within several days to follow, the lowest price support presently found on any chart.

Further downside action would likely result in another negative price retest like we saw during the last week on the CLK20 expiring contract.

Mid – Term WEEKLY Price Outlook … 4 / 27 – 5 / 1

The main trend remains bearish according to the weekly swing chart.

A trade through the $6.00 price area will signal a resumption of the downtrend.

The main trend will change to bullish on a trade through the last main top at the $55.00 price area.

However, this is extremely unlikely.

The minor trade range is between the $34.00 price area to $6.00 price area.

It’s 50% level or pivot point is at the $20.00 price area.

The short-term trade range is between the $55.00 price area to the $6.00 price area.

It’s 50% level comes in at the $31.00 price area.

The main trade range is the $64.00 price area to $6.00 price area.

It’s 50% to 60% retracement zone which is between the $35.00 price area and the $42.00 price area serves as a major price resistance.

Weekly Technical Forecast

Based on last week’s price action, the direction of the June WTI crude oil futures contract for the week-ending May 1 is likely to be determined by trader reaction to a downtrending angle at the $15.00 price area.

Weekly Bullish Scenario

A sustained move over the $15.00 price area will indicate the presence of buyers.

If this move creates enough upside momentum then look for a surge into the minor pivot at the $20.00 price area.

Since the main trend remains bearish, sellers are likely to come in on the first test of this level.

In attempts of the bears trying to overtake it, could potentially trigger an acceleration to the upside with the next major target coming in at the $31.00 price area.

Weekly Bearish Scenario

A sustained move under the $15.00 price area will signal the strong return of sellers.

The daily chart indicates there is plenty of room to the downside with the next downtrending target angle coming in at negative price areas.

Short – Term DAILY Price Outlook … April 28, 2020

For Tuesday, the $12.00 price area remains a long-term support level that can absorb not only daily selling, but also selling pressure throughout the balance of May’s trading activity as long as the market continues placing weekly and monthly settlements above the $12.00 price area.

Upside today, the $17.00 price area would most likely contain initial strength, beyond which the $19.00 price area is able to contain the balance of the session’s strength.

A settlement today above the $19.00 price area indicates potentially reaching the $22.00 price area within several days and a next $30.00 price area target could then potentially be within reach by the end of next week.

Downside today, opening / breaking below the $12.00 price area allows a further fall to the $11.00 price area intraday.

A weekly settlement today below the $12.00 price area critical support will likely allow for further bearish downside back into the single digit prices again, potentially as low as the $1.00 price area by the week’s end.

Let’s reflect on Monday’s charts above.

The price action on the 240 minute chart(s) exited congestion during the pre-market hours on Monday morning on the currently traded and 2 future expiring contracts.

A successful retest of the $12.00 price area held prices from falling further.

Today’s closing price on the closest expiring contract CLM20 was $12.93.

Fresh Hawkeye Demand Zone(s) on the 240 / 480 / 960 Minute and Daily Charts all held selling pressure from falling further during Monday’s trading session.

Confluence among Hawkeye Supply and Demand Zones stacks the odds in our favor of predicting price action and are key for establishing price targets.

The Zones on the 240, 480 & 960 Minute charts all presented clear target(s) to have taken a short position when price exited congestion on the 240 chart.

While there is clearly a bearish sediment in the market, the $12.00 price area remains a key area to hold and resume closing above in order to avoid retesting single digit prices again.

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On Wednesday, the United States Energy Information Administration reported that U.S. crude inventories rose another 15 million barrels for the week ended April 17 to 518.6 million barrels.

That marked a 13-week climb and followed a record weekly increase of 19.2 million barrels a week earlier.

Another large oil build propels us closer to a record oil inventory level, which is now less than 17 million barrels away.

As refining activity dips to a new 12-year low, the crude build has actually been kept in check by lower oil imports – dropping below 5 million barrels per day for the first time in the weekly data since 1992.

Rising Unemployment, Rising Oil Inventory

The Labor Department reported that the number of Americans applying for state unemployment benefits totaled 4.427 million last week.

Combined with the prior four jobless claims reports, the number of Americans who have filed for unemployment over the last five weeks is 26.45 million.

That number far exceeds the 22.442 million jobs added to payrolls since November 2009, when the U.S. economy began to add jobs back after the recession.

The bottom line is that 26.45M people are NOT consuming products produced by crude oil.

They aren’t commuting, going to the gym, going out to dinner or leisurely traveling.

April Crude Oil YEARLY Cycles

• The 10 year cycle makes a high on April 15, the pulls back into April 19 then makes a major top on May 2.
• The 20 year cycle makes a major low on the April 11 then rallies into the April 25.
• The 30 year cycle continues its sell off into April 18 then rallies into the end of the month.

Historically, April is the second most bullish month of the year for crude oil.

With that said, there’s really no clear correlation to support that statement right now.

But, there is a seasonal tendency for oil prices to rally during the latter part of this month.

Key turning point dates:

• April 3
• April 16 to 17 – close to 10 and 30 year cycles
• April 23 to 24 – close to 20 year cycle

Long-Term MONTHLY Price Outlook

The $12.00 price area can potentially absorb annual selling pressure, above which the $28.00 price area remains a several week target, the $57.00 price area is potentially in reach over the next several months.

Upside, the $28.00 price area can absorb buying pressure through the remaining May trading sessions, with a daily settlement above the $28.00 price area indicating a good annual low has been placed.

The $57.00 price area then becomes a several month target where the broader market can potentially place this calendar year’s high.

Downside, a daily settlement below the $12.00 price area will most likely yield a $3.00 price area test within several days to follow, the lowest price support presently found on any chart.

Further downside would result in another negative price retest like we saw earlier in the week on the May CLK20 expiring contract.

WEEKLY Price Outlook … April 20 – 24, 2020

The main trend remains bearish according to the weekly swing chart.

The market is in no position to change the main trend to bullish, but holding the mid-March bottom at $21.00 price area which could help June WTI crude oil build a solid enough base to support a strong short-covering rally…

While the short-term trend also remains bearish.

Taking out the short-term top at the $34.00 price area won’t change the main trend to bullish, but it will shift momentum to the upside.

Taking out $21.00 price area will reaffirm the downward bearish trend.

The short-term range is between the $21.00 to $34.00 price range.

Its 50% level or pivot at the $28.00 price area is controlling the weekly direction of the market.

On the upside, the nearest 50% level resistance comes in at the $38.00 price area.

Based on the past week’s price action, the direction of the June WTI crude oil market for the week ending April 24 is likely to be determined by trader reaction to the pivot at the $28.00 price area.

Downside, a sustained move under the $28.00 price area will indicate the strong presence of sellers.

The first target is the main bottom at the $21.00 price area.

Penetrating this bottom will indicate the selling pressure is gaining traction.

Crossing to the weak side of the downtrending angle at $19.00 price area will put the June WTI futures contract in an extremely bearish position, most likely creating a further downside move.

Upside, a sustained move over the $28.00 price area will signal the presence of optimistic buyers.

If this move is able to create enough upside momentum then look for a potential spike into the $34.00 price area.

Short – Term DAILY Price Outlook … April 24, 2020

For Friday, the $12.00 price area remains a long-term support level that can absorb not only daily selling, but also selling pressure throughout the balance of May’s trading activity as long as the market continues placing weekly and monthly settlements above $12.00 price area.

The next several weeks are likely to yield an upside potential of testing the $30.00 price area.

Upside today, the $19.00 price area most would likely contain initial strength, beyond which the $22.00 price area is likely and able to contain the balance of the session’s strength.

A settlement today above the $22.00 price area indicates potentially reaching the $27.00 price area within several days.

Downside today, breaking below the $12.00 price area allows a further fall to the $11.00 price area intraday.

A weekly settlement today below the $12.00 price area will likely allow further downside to the $3.00 price area next week.

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While the markets were spiking last week thanks to some optimism on the COVID-19 vaccine and promising plans to begin a slow reopening of the United States economy, oil is once again marching to the beat of a different drum. 

Having suffered the most precipitous collapse ever with prices never seen before and even trading into the negative, something more positive is apparent. This is not reflected in the immediate trading price. Rather, this is being reflected in future expiring contract trading prices attempting to recover.

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Weekly Crude Oil Inventory Report

Oil dropped to its lowest level in more than 18 years during Wednesday’s trading session amid reports suggesting persistent oversupply and collapsing demand due to COVID-19 outbreak related economic lockdowns.

The American Petroleum Institute (API) said on Tuesday, United States crude inventories increased by a larger than expected amount of 13.1 million barrels. According to data from the United States Energy Information Administration, for the week ending April 10 inventory increased by 19.2 million barrels.

Analysts had been expecting a rise of 12.02 million barrels. There is no feasible agreement that could possibly cut supply by enough to offset such near-term demand losses.

Headlines Suppressing Demand

Consumer and manufacturing reports for March showed a significant hit to the economy from the COVID-19 outbreak was even swifter and deeper in the early weeks of the shutdown than anticipated.

March retail sales fell 8.7%, the most ever recorded in government history. The New York regional manufacturing activity hit an all-time low, declining a shocking 78.2%. Industrial production slipped 5.4%, the largest decline since 1946, and manufacturing was down 6.3%, a record reflecting in part the 28% decline in auto production as plants shut down.

The economic reports showed the double whammy of state shutdowns in mid-March on two pillars of the economy – the consumer and business. The reports were even more dire than expected, and foreshadow even worse declines in April’s activity, with state shutdowns affecting areas responsible for more than 90% of the economy.

Unemployment Suppressing Demand

The Labor Department reported that the number of Americans applying for state unemployment benefits totaled 5.245 million last week.

Combined with the prior three jobless claims reports, the number of Americans who’ve filed for unemployment over the last four weeks is 22.025 million.

That number is just below the 22.442 million jobs added to payrolls since November 2009, when the U.S. economy began to add jobs back after the recession.

Nearly an Entire Decade of Progress Set Back in Only 4 Weeks Time

In 4 weeks time we have nearly given back all of our employment progress made in the past decade. That’s 22 million cars that don’t get started and driven to work everyday, along with 22 million incomes that have been impacted causing no travel demand, creating limited forms of consumption. In conjunction with heavy over supply and forced suppressed demand due to shutdown orders, the foreseeable future for energy prices look very grim.

On The Charts