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WTI crude – How big a correction will we see?

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Risk appetite hits oil prices

Oil prices are not having much fun in the current risk environment which shouldn’t come as much of a surprise considering global growth fears and their impact on risk are intrinsically linked to future oil demand.

It’s one of the often more overlooked drivers of oil prices but the correlation is clear. Oil has been on a slide since Trump claimed to have called OPEC regarding oil prices, which came at a time when the market was already looking rather stretched to the upside.

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We’ve seen a bit of a corrective move since then – just shy of 10% – but that may increase. We’re currently trading at a very interesting level – around $69-70 in Brent and $60-61 in WTI – a break of which could signal more pain to come. Given the recent shift in risk appetite, this is perfectly feasible.

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Craig Erlam

Craig Erlam

Former Senior Market Analyst, UK & EMEA at OANDA
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary.

His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News.

Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
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