WTIC West Texas Intermediate Crude Oil Weekly Chart; Oil Prices at 7-1/2 Year High; Overbot; Negative Divergence; Upper Band Violation

Oil is trading at elevated prices due to the uncertainty around the pandemic and potential Russia/Ukraine conflict. Oil is in a choppy sloppy pattern for the last year but commodities traders probably liked the oscillating trading moves on a weekly basis.

Oil, black gold, Texas tea, as Jed would call it, tops out last summer with negative divergence so down she goes. Price recovers, you would have to look back and see what the news flow was at the time, and prints a higher high in price in late October with neggie d set up again so another spankdown is on tap, and occurs. The histogram turned long and strong during that rally so it wanted to see one more higher high in price and the histo got its wish with WTIC jumping higher towards 90. The upper standard deviation line is at 89.02. The price high is 88.84. It would be better if price tagged the upper band instead of simply coming near it.

In the very near term, the RSI has some momentum, also the MACD and stochastics so a week or two more of buoyancy, perhaps as 90-92 is nailed may be on tap. However, the red lines show universal neggie d across all indicators a downward force to be reckoned with. The chart hints that oil will top out anytime over the next week or two, it may be topped-out now, and then receive the neggie d spankdown trailing lower for several weeks like the prior downdrafts.

It the Ukraine/Russia tensions ease, that will reduce prices. There have been supply issues for several weeks but some of these will be alleviated as time moves along and more supply means lower prices. The oil guru's are calling for price to jump over 100, 120, some even say oil will explode to 200. It would if a war starts.

Interesting. If you bring up the $WTIC monthly chart, price makes a higher high over the last 3 months, however, the chart indicators are neggie d except for the MACD that remains long and strong. Keystone, that sounds like Greek, can you speak English? What that means is the monthly chart for oil is agreeable to seeing a multi-week pullback in oil prices as per the weekly chart above, however, the MACD on the monthly wants oil to come back up after that downward swoon one more time on the monthly basis. This will place neggie d on the monthly chart and mark a long-term top in oil likely occurring in the March-May time frame. So oil tops out now or over next week or two, then down for 4 to 6 weeks, then a rally again, back up to the current highs and a little more over a 4-6 week period, which places a long-term top in oil April-June. Of course war and many other things could drastically change the projection and the charts would adjust.

The long-term chart of oil is shown above and these prices have not been seen since September/October of 2014 which is 7 years and 3 months ago. Get ready to pull out your wallet and pocket book to pay more for gasoline at the pump. Not only that, all goods and services rise in price because they are faced with the higher fuel costs. The average consumer is left holding the bag. On Wall Street, and in the Chicago pits, there's an old joke about gasoline prices. "They go up like a rocket, but down like a feather."

Keystone is not trading oil these days but will watch it and may take a short as the oil top forms. If you bring up the $WTIC daily chart, you see a higher high in price as the indicators are flat or lower; negative divergence. This is why the sogginess appears in price and further weakness would be expected on the daily basis. Since the daily is ready to roll over, that hints that the top in the weekly is at hand. Oil prices will be news driven going forward as the war drums beat, the pandemic spreads and the poets dream. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.