WTI

#WTI#Crude opens with a gap down of 30% on 9th March 2020, to the lows of 2015-2016. In 2009, prices moved from 33 to 66 (~+100%) in 4 months. In 2016, prices moved from 26 to 51.5 (~+100%) in 5 months. This time, however, prices sliced through these lows instead of seeing strong buying interest. This is bearish for the commodity. At the current price of US$28.34, prices are -60% from the 2018 high of US$76.

With most of the world population in a lockdown, it looks highly unlikely that prices will rally to a weekly close above $40 in the near future. Watch out for the Bears as prices move up from $32 to $38. It is more likely that crude price will consolidate in a range below $40 (the lower end of the range at $20) before the next move. A V-shaped recovery will necessarily require the commodity to trade comfortably above US$ 43.