Crude Oil In A New Bear Market?

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Published : June 26th, 2017
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Category : Technical Analysis

The newest bear market is in crude oil. The definition of a bear market is when an ‘asset class’ is down more than 20% from its recent high: (Bear Market Rally Definition Investopedia). It has been more than five years since the market fell so hard so fast from its’ high. Two months later, it was even lower. During the past 20 years, the SPX has struggled when oil fell into a bear market!

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Oil prices broke to a fresh seven-month low on June 21st, 2017, with WTI Crude Oil dropping to $42 per barrel. The renewed and heightened pessimism over the pace of rebalancing has sunk in as O.P.E.C., is struggling to reduce its’ inventory. U.S. shale continues to grow production. There are large volumes of supply back in the market at the worst possible time!

WTI Crude Oil Now Technically Bearish

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Most oil companies are now adjusting to “lower for longer.”

The Wall Street Journal reports that “most in the oil industry are resigned to low prices for years to come, recognizing that a range of $50 to $60 might be a semi-permanent equilibrium.”

Between 2014 and 2015, 105 oil producers and 120 oilfield service companies went through bankruptcy.

By Chris Vermeulen for Safehaven.com

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Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and author of the book: 7 Steps to Win With Logic Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better. His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility. He has also been on the cover of AmalgaTrader Magazine, and featured in Futures Magazine, Gold-Eagle, Safe Haven,The Street, Kitco, Financial Sense, Dick Davis Investment Digest and dozens of other financial websites.
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