Watch for Crude Oil "Washout" Before Bottom Hits, Plunge to $15 Possible

Core Viewpoint - The outlook for crude oil prices in 2026 appears bleak, with expectations of continued downward pressure and potential for prices to drop significantly unless a major market shift occurs [2][6][10]. Crude Oil Market Analysis - Historical trends indicate that the current bearish market for crude oil is the fourth in two decades, with previous downturns ending in significant price drops [5][6]. - A short-term bounce in crude oil prices is anticipated due to seasonal factors and a weak dollar, but this is not expected to lead to a sustained recovery [3][4]. - The market has experienced a risk premium due to geopolitical tensions, particularly related to the Russia-Ukraine conflict, which could influence future pricing [9][10]. - Analysts suggest that a capitulation in price and sentiment is necessary to identify a true market bottom, with potential for prices to reach $40 per barrel if conditions worsen [7][10]. Natural Gas Market Analysis - Natural gas prices are influenced by seasonal factors, with a historical pivot point around $3.60; prices above this level tend to be bullish, while those below are bearish [13][14]. - Current natural gas prices around $4 may seem high compared to recent lows but are significantly lower than the peaks seen in previous years [16][17]. - Expectations for natural gas prices should be tempered, with projections suggesting a trading range of $2 to $5.50 in the near future [17].