Cramer Says This Chart Signals Good News For Oil: 'Boom And Bust Cycle In Commodities Never Stops'

Prominent market commentator Jim Cramer analyzed Carley Garner’s chart to explain how some commodities could soon make a comeback.

What Happened: “The charts, as interpreted by Carley Garner, tell us that the boom and bust cycle in commodities never stops, and right now that’s good news for oil … natural gas and wheat prices,” Cramer said on CNBC.

Also Read: Best Oil ETFs

Commodity prices witnessed a significant rally during the first half of 2022 led by Russia’s war on Ukraine and the subsequent concerns surrounding supply. However, as inflation soared and the Federal Reserve resorted to a series of rate hikes, fears of recession created demand concerns which led to softening of prices.

The United States Brent Oil Fund BNO gained over 26% in the last year while the Vanguard Energy Index Fund ETF VDE rose over 40%.

Chart Analysis: Cramer examined the weekly chart of West Texas Intermediate crude to explain Garner’s analysis. He said Garner was adamant last year that oil would revert to its previous trading range once sanctioned Russian oil was rerouted to India and China. The chart showed her prediction came true, Cramer noted.

Chart courtesy: CNBC

The market expert said Garner expects oil to trend between $65 and $70 a barrel on the low end in 2023, and to perhaps the mid-$90s and low $100s on the high end. “She expects this channel to be resilient, and that is why she recommends buying the dips,” Cramer said.

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