WARNING: Brent Crude could crash to $70 - Here's why

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Here’s why I predict a 30% crash for Brent Crude in the next few weeks
Russia is spooking investors out of Brent Crude

Three weeks ago, Brent Crude soared to over $139 per barrel. This was after Russia invaded Ukraine. The Brent Crude price hit nearly a 14 year high at one point.

Then two weeks ago, volatility in the market kicked in where we saw one of Brent Crude’s biggest one day crashes of over 6.3%.

Fast-forward to last week, and we saw the price of oil strike below $98. The price dropped due to a number of reasons.

First, there are expectations of a potential ceasefire as Russia is in  talks with Ukraine.

Here’s what Rahul Kalantri, vice-president commodities Mehta Equities Ltd, had to say:

“Crude oil prices showed heavy selloff amid Russia-Ukraine de-escalation talks…”

Second, oil plunged last week Tuesday after Sergel Lavrov, the Russian Minister, said Russia is in favour of the Iran nuclear deal to resume.  

In fact, Russia has claimed it wants the Iranian nuclear deal to be signed ASAP.
Now what’s important to know is Russia is the world's largest exporter of crude and fuels.

Lately, we’ve seen a number of buyers shun Russian barrels since the invasion.
This could disrupt millions of barrels of daily crude supply.

And so, with fear being the driving force and spooking the oil market, speculators, institutions and investors are abandoning the Brent Crude market.

The USA is pumping their oil production.

According to a new S&P Platts survey, Opec has managed to raise their production by 560,000 bpd in February.

President Biden asked repeatedly for OPEC to increase its production to ease the oil price for the American consumer.

This is all down to basic economics.

When supply of oil goes, up we see the demand for oil drop.

And when demand goes down, the Brent Crude price falls with it.
Finally, the charts agree with the downside to come.

Why this Head and Shoulders pattern is showing 70$ on the cards for Brent Crude

Since 23 February 2022, the 4-hour chart of Brent Crude oil price moved in a reversal breakout pattern known as a ’Head and Shoulders pattern’ (shaded area).
 
Basically, this is a chart formation where the price has three rounding bottoms. One for the left shoulder, one of the head and one for the right shoulder.

The price also bounces on a support (floor level), which is called the neck line.

In this case the neck line is at $100 on the dot.

Looking at the price action of Brent Crude and taking into account, the factors that I mentioned today – I expect the price to continue to drop further.

My first prediction for Brent Crude is for it to hit $70 per barrel.

There are two main technical reasons for this.
 
The first reason is the price has broken below its 200 day Moving Average (Blue line). This is a bearish signal for buyers to exit their Brent Crude positions and for sellers (shorters) to get in.

Second, the price target is the first support level from a few years back which most traders will be watching…

Here are two ways to profit from the 30% Brent Crude oil crash
 
First, you can sell (go short) the Brent Crude CFDs and hold until it hits the price target.  
 
Second, you can wait for my SMS with Red Hot Storm Trader where we will be shorting resource stocks that fall when Brent Crude drops in price such as, Sasol, BHP Billiton and Anglo American.
 
Third, you can get on board and profit from offshore commodities and stocks with Pickpocket Trader...

PS: Trader X is profiting big time from the Brent Crude.
Last week, we got in at $111 and it’s currently well in the money. One of our members banked R92,000 in one day from this one trade. Click here so you don’t miss the next profitable trade idea!