Yesterday crude oil prices fell briefly below their December 2008 Financial Crisis lows before recovering. Our target of US$12.00+/- a few dollars per barrel remains on track having made this prediction in 2011. We had predicted that oil would consolidate between US$40 – $75 per barrel which it did albeit briefly before resuming it’s slide.
So as we approach our long term target what can we expect from here?
Oil will bounce out of its lows near $12.00 per barrel sometime in 2016. It has the capacity to rally back towards the consolidation phase US$40-$70 per barrel. This bounce will coincide with a strong US dollar and a stronger US economy over the course of 2016-2017. We anticipate however this will not be the birth of a new oil bull market but the beginning of a sideways long term basing formation lasting many years before commencing a move towards US$100 per barrel.