Crude is consolidating in a narrow band between $44 and $55/barrel. Supply continues to exceed demand and storage facilities are approaching capacity. The bear trend is expected to continue. Failure of support at $44/barrel would confirm.
Another downward leg for crude?
Nymex Light Crude is headed for another test of support at $45/barrel. Breach would signal a decline, with a medium-term target of $35/barrel*.
* Target calculation: 45 – ( 55 – 45 ) = 35
Saturation of available storage capacity (see Crude in Contango) is expected to force sellers into the market and drive prices lower.