Decline of Nymex Light Crude September 2015 futures (CLU2015) is slowing as it nears the medium-term target of $40/barrel*. Narrow consolidation at this level would suggest a continuation of the down-trend.
* Target calculation: 50 – ( 60 – 50 ) = 40
Long-term June 2017 Nymex Light Crude futures (CLM2017) are consolidating in a narrow range at the medium-term target of $54/barrel*. Continuation of the down-trend is likely but recovery above $55.40 would warn of a bear market rally (not a reversal). Breach of support at $54 would offer a medium-term target of $50**.
* Target calculation: 60 – ( 66 – 60 ) = 54; ** Target calculation: 56 – ( 60 – 54 ) = 50
Expect crude prices to continue falling. The August 2015 Report from the International Energy Agency indicates that oversupply is growing. It is likely to take at least a year before balance is restored.
