McClellan Financial Publications analysts have put forward a compelling argument suggesting that oil prices are on the verge of establishing a bottom in the coming months.
Employing an innovative approach, these analysts have correlated recent gold price trends with crude oil prices, adjusted forward by approximately 19.8 months. This method aims to underscore the tendency for gold price movements to influence oil prices after this specific time frame.
While acknowledging occasional discrepancies, such as the disruption caused by Russia’s invasion of Ukraine, the report emphasizes the consistent effort of prices to realign and return to their historical correlation following such events.
According to The McClellan Market Report, the model predicts a bottom in mid-2024, followed by a subsequent rise towards the end of the year. However, this projected uptick in oil prices might pose challenges for federal politicians seeking reelection in November, particularly if the ongoing rally in gold prices persists.
In late 2023, crude oil prices experienced an earlier decline than expected, diverging from the predicted peak indicated by gold price movements. Nevertheless, the report underscores that oil prices have since realigned with this pattern.
Looking ahead, the forecast suggests that the anticipated bottom is likely to manifest around June or July 2024, although the precise timing of turning points may vary slightly.
The report underscores the importance of monitoring additional indicators as summer approaches to pinpoint signs of the impending price bottom for oil or the commencement of an upturn.
In essence, while further price declines may occur in the interim, the overarching expectation remains that oil prices will soon approach a bottom, signaling potential opportunities for market participants and policymakers alike.
