Although charts with shorter time frames would appear to suggest that crude is in a bullish consolidation, the continuous weekly chart displayed (see inset) provides a speculative basis for inferring that the bull market peaked with March’s surge to 130.26.  I say this is speculative because there is nothing in this picture arguing against another bull leg once the spectacular Covid rally begun in 2020 has had time to regain strength.

There are reasons to doubt this scenario, however, particularly the significant weakening of China’s economy. Energy demand from China sets the global price of oil at the margin, and when the nation’s manufacturing sector in particular is imploding, as it is now, no amount of cartel price-rigging or ginned-up constraints on supply can surmount the deflationary effect of falling demand. An even bigger picture suggests the global economy has begun to shrink, with a report on Friday that U.S. GDP fell 1.4% in Q1. (Leave it to the WSJ to publish an op-ed by that useful idiot Alan Blinder saying IF a recession comes, it will be mild.)  If a U.S. recession has indeed begun, as I asserted in my commentary last week, then the March high in crude is certain to stand for a very long time.  ______ UPDATE (May 3, 10:28 p.m.): Check out the Trading Room thread starting with my 12:50 post, which produced an easy winner bottom-fishing June Crude futures. The 99.02 downside target in the pattern linked in my post will remain my price objective unless the ‘C’ igh gets stopped out. _______ UPDATE (May 4, 11:)3 a.m.): Since the minor bearish pattern we used yesterday to make money (from the long side!) has gotten stopped out, and because the upturn has come from the midpoint pivot of a corrective pattern, we will gaze upward once again.  This pattern, with a target at 111.88, is the one you should use for now to forecast and trade.  Please ask in the chat room if you have a timely concern. ______ UPDATE (May 5, 9:15 p.m.):  The futures popped to within a hair of the 111.88 target, although getting short there would have required nimble play with a ‘reverse’ pattern because the pivot was not actually touched.  The correction has been shallow thus far, but it would take a print at 113.52 to signal a breakout.