Crude oil reversing up...with power.....

It was quite a long time since my last up-date on crude oil in August 2022 titled Is crude oil creeping up again? I was in opinion at the time that it was congesting, while the support level mentioned in Crude oil up-date 16/7/2022 stated at 86.11.

After months of tranquility on crude oil, we finally received a very bad news on this commodity. OPEC+ has decided to cut production by 2 million barrel a day beginning 1st November 2022! This after the meeting among the 13 nations of OPEC together with the 10 allies of Russia.

It is definitely not good a news for the consumers, it indicates a rise in oil prices especially upon winter arrival, which the northern nations need the fuel most.

It also raised accusation of the west that OPEC is siding with Russia, which was refuted by OPEC itself.

As a result of this decision, the oil price shot up overnight. 

Fig 1. Crude Oil Weekly Chart

Crude oil reached the support that I estimated and went further to a low of 76.25 last week. It also coincides with the support of 144-week moving average. A reversal at this point could mean the completion wave, which I believe is a 3-wave counter wave due to the nature of its move.

The ascension this week is strong with a bar of long body that penetrated both 89-week and 55-week moving averages. This is significant, as I deem 55-week moving average to be a significant support-resistance level. It will then be possible that crude oil comes with a mild retreat to retest the 55-week moving average support before continues on its journey upward.

Where will it be heading?

Using more immediate projection set up (in blue), I am seeing resistance at between 129.98 and 143.73. This will mean a new record for oil, at its worst, it may reach 161.20 (127% projection).

By then the cost of oil will be so unbearable for many countries.  I resist to think what might happen next. At the back of my mind was Desert Storm. Let's hope that we won't go that far.