Charts suggest oil will bounce in the near term and then move lower, says Jim Cramer

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Oil’s current run is likely to be short-lived as it will decline later this fall, TBEN’s Jim Cramer said Wednesday.

The charts, as interpreted by Carley Garner, suggest oil could climb to the mid-$90s in early to mid-October, but at that point she expects it to peak, potentially leading to a major collapse towards the end of the year. the year,” said the host of “Mad Money.”

Crude oil prices have fallen in recent months after skyrocketing earlier in the year on fears that Russia’s invasion of Ukraine could severely curtail global supplies.

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There have been some positive signs for oil lately, Cramer acknowledged. OPEC+, an alliance of OPEC and non-OPEC partners, has made a small cut in production targets from October. According to Bloomberg, the Biden administration is also considering the possibility of replenishing the Strategic Petroleum Reserve if prices fall below $80 a barrel.

Still, oil could very well fall below that price to about $60, he said.

To explain how Garner’s analysis led to that conclusion, he examined the weekly chart of US West Texas Intermediate crude prices:

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Cramer said oil could rebound if the $80 a barrel support shown in the chart holds, and Garner wouldn’t be surprised if oil moved towards the low to mid $90 level. Oil could even rise above $100, but that’s unlikely and would be a “last hurrah” for the commodity, according to Garner, he said.

Cramer added that if the oil price falls below $80, the next potential bottom is around $60 — and with the Federal Reserve gearing up to hike rates next week in its aggressive campaign against inflation, not much should be needed. to push the oil down even more.

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“This is not a commodity that will thrive in a Fed-imposed recession,” Cramer said.

For more analysis, watch Cramer’s full explanation in the video below.

Watch Jim Cramer Analyze New Charts From Carley Garner

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