25 July Crude Oil Elliott wave analysis: at the brink of a crash?


Crude Oil has been very progressive this year. Is it at the brink of a crash? The following 25 July Crude Oil Elliott wave analysis looks at this possibility based on Elliott wave theory.

The black commodity has gained more than 45% this year after a successful Oil cut plan by world’s largest producers. However, price might be at the verge of a big drop in the coming months. We might probably have a bearish end of the year for the Oil market. There were reports that large Oil firms are putting more attention on Natural gas and with Electric vehicles getting rising global attention, the need for Crude oil products might drop in the nearest future. From Elliott wave perspective, the surge this year is a bullish correction of the 2013-2016 crash. The chart below shows the long term view.

25 July Crude Oil Elliott wave analysis: Daily chart

In 2013, Crude Oil price was as high as $120 per barrel, then followed a big crash which lasted till 2016. At the end of the crash, price was around $25 and completed a clear impulse wave. At the end of this impulse wave, it was clear that price would make a correction upside. At the time we were expecting this, OPEC and other Oil producers started having meeting on ‘Oil cut deals’ to reduce supply and drive prices higher. Did Elliott wave theory anticipate the event? Yes, it did. The Oil cut deal was successful and price surged – hit $75 from $25. Here we go again. The correction is about to end from Elliott wave end. Is the theory anticipating another event that would lead to price crash? Don’t discard it completely. At $79-80, we have 61.8% Fib retracement of 2013-2016 crash. Price might make one more move close to this level before the expected crash. The chart below shows wave C with its sub-waves.

25 July Crude Oil Elliott wave analysis: H4 chart

Wave C is clearly an impulse wave with an emerging ending diagonal mouth as the 5th wave. If this last upward push happens to $77.5-$78, we might most probably see another price crash below $60 first. Depending on the structure of the crash, we may see far lower prices. An event might come later to justify this but Elliott wave can anticipate it.

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