WTI Crude Oil Forecast: Market Presses Resistance

Christopher Lewis

Do not expect this market to be easily shaken, because it has had plenty of opportunities to start selling off recently.

The West Texas Intermediate Crude Oil market has rallied again during the trading session on Wednesday, but continues to struggle with the idea of breaking out to the upside. The $43 level above is massive resistance, and as the inventory numbers came out less than ideal, the idea of crude oil rallying significantly from here is a bit of a stretch. Many traders are focusing on the possibility of the vaccine opening up the economy. Because of this, there are people out there willing to buy energy based on a possible stronger future.

There was a huge oversupply of crude oil before the coronavirus hit, so we will continue to see a bit of a ceiling on this market. That's why I do not trust rallies, even though it has been rather strong over the last several weeks. The $43 level seems to be a massive amount of supply, so it will be interesting to see if we can continue to go higher. If we cannot, and especially if we break down below the $40 level, then we will see a push to the downside, perhaps down to the $35 level. That is an area in which we have seen buyers previously, so I would not be surprised to see a bit of a bounce from there.

However, if we were to break down below there, it is likely that the market could drop all the way down to the $30 level, perhaps even opening up a move down to the $25 level. I do not expect this market to be easily shaken, because it has had plenty of opportunities to start selling off recently. What we are looking at here is the possibility of a move into the market by simply shortening signs of short-term exhaustion. We will continue to see a lot of choppy behavior, but we are clearly struggling to go higher. If we do break out, then the market would probably go looking towards the $50 level, but we are not quite there yet.

Crude Oil

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.