Oil is not looking good...

Well, the war has started with US and Israel attacking Iran. The commodity affected most is definitely crude oil. Iran is an oil producing country supplying mainly to China. It is also a threat at the mouth of the Red Sea, stopping oil shipment from Saudi Arab. It will definitely cause a stir on oil as a result.

I have captured news on hike on oil prices since the war started. But since I am no longer driving, I thought that if might not affect me that much. 

Curiosity still drove me to check on this counter, though.

The last time I did a piece on oil was Crude oil is cooling down dated 12th May 2024. I was adamant at the time of its immediate support at between 60.41 to 71.06, with possible extension to 28.79 to 54.12 should the prior level failed.  

It reached a low of 55.30 by 5th May 2025, maintaining a horizontal congestion for some time. This came very close to the higher side of my lower zone predicted. 

Fig 1. Crude Oil Light weekly chart

However, as can be seen from the chart, while it has been on a decline since its peak of 130.50 on 7th April 2022, its gradient was very mild. this indicated counterwave move. This is confirmed by continuous overlapping highs and lows. This in fact created a wedge stretching multiple years. 

Breaking out upward is definitely a certainty. The question is: How far?

With the measurement started from the negative zone of -40.32 on 20th April 2020, it allows a long stretch on breakout. estimating using its projection, I am seeing the 61.8% projection resistance level at 160.48. This follows by its 100% projection of 226.97.

Certainly, these values are unthinkable for us right not. At the same time, it is a logical measurement using Projection pattern.

As of last week, crude oil shot up in a long single bar. I will consider this a relatively good news. Why? This an over reaction from the market. 

While Crude Oil opened this morning with a continuation upward, reaching a high of 119.48, resisted by its 261% projection of 119.11. 

It has since retreated. As of the time of this entry, it is at 101.19.

I estimate that it will continue to retreat, correction downward for now, with its support at 67.54. 

However, it is not very good news over a long period of time, because the trend direction is now set upward. The long-term estimation that I have set is a possibility. 

This is not a very good outlook for our coming future, it means that the energy that we are obsessed with is going to be very expensive.