We published an article on the 27th of June, 2022 when the price of oil was above $100 per barrel, that the oil price will experience a bearish turn that will push price down into the two-digit zone. Ever since then, the bulls have failed to come up with a rally.
Currently, the market is basing due to the increase in energy prices in Europe which is slowing down the demand for oil products. Another reason why the market could be basing is due to the increased interest rates. Yet another reason for the market basing is the fear of a recession.
Since June, the monthly candlesticks for the oil price have closed bearish. The lowest price in August was $85 per barrel. Despite the price rallying to $90/barrel in the first few days of September, the bears have pushed price to an 8-month low of $81 per barrel.
In the aforementioned article, we forecasted a bearish turn that will push price to $62 per barrel. Currently, we are $19 away from that target. On the monthly chart, RSI indicates that price has been overbought. If governments of nations introduce higher interest rates in the coming days or weeks, we might be seeing the oil price finally fall to $62 within a short period of time.
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