Oil Prices: Confirmed Top, Is $20 Possible?

Over the last few months, I've read compelling arguments supporting lower oil prices. Many oil producers continue producing oil just to meet their debt obligations, no matter what the price. Saudi Arabia is losing its influence as a functioning cartel, and it's nearing financial desperation. Oil storage facilities across the globe are approaching capacity. Once full, that excess oil will be put to market. All these factors add up, and equal lower oil prices.

WTIC Chart Analysis

Prices closed significantly beneath the 50-day EMA confirming the $51.67 intermediate cycle top. Prices should now continue lower into an August low. If Shilling is right about $20.00 oil, prices will bounce from an August low, approximately 6-weeks, and then drop into January.

Oil prices are headed lower, we will just have to wait and see how low.