Crude oil price trends tend to provide meaningful insight into where the economy is headed. Energy prices generally correlate positively with global economic growth and oil prices have crashed during recessionary periods. Many investors have worried the trade war between the US. and China would negatively impact global growth as the decelerating growth rates in China and the maturing nature of emerging market economies will not help oil prices. With deteriorating macro backdrop, OPEC recently agreed to deepen production cuts with many investment banks, economic data providers and research firms adjusting their expectations for crude oil prices based on supply cuts. In summary, WTI Crude is expected to trade between $55 to $65, whereas Brent is projected to trade in the mid-$60s to low-$70s, suggesting that oil prices will remain stable without any significant upside or downside in 2020. The underlying assumption is that the weakening demand will be offset by supply cuts. Our underlying assumption on oil prices vastly differ from the pundits, the current Elliott Wave pattern suggest oil prices will fall much further than projected prices. How much of a fall? $20s anyone?
