WTI Crude Oil Forecast: February 2021

Robert Petrucci

January has produced more bullish momentum for WTI Crude Oil and speculators are wondering what will happen next.

Another month of solid gains has been attained by WTI Crude Oil in January. Whether it was optimism that the global economy will rebound as the coronavirus vaccine is distributed, President Joe Biden’s expected intervention in the US energy sector with a decision to curtail the Keystone project and limits on fracking, or simply speculative fever is not easy to discern. Perhaps it is a combination of all three and more within the complex world of commodities which has affected the price of crude oil.

Speculators, however, via their CFD contracts, do not actually have to worry too much about the micro ingredients within the price of WTI Crude Oil. The gains the commodity has made are in plain sight, and the bullish trend has proven durable and strong since late October 2020 when WTI was trading at nearly 35.00 USD per barrel. The current price of the commodity is near 52.50, which is a sizeable difference, and one which has delivered a rather healthy incremental step ladder up in values for traders who have pursued the bullish trend.

The problem now for speculators may be that a reasonable assumption is that WTI has gained quickly and may start to run into headwinds. If there has been a speculative buying frenzy based on the assumption that President Biden would try to curtail US production in the crude oil business due to environmental concerns, it may be wise to speculate that this component has now been baked into the current value of WTI, which is certainly challenging highs. In fact, the current price of WTI is within a price ratio it traded at this time last year, before coronavirus fears swept through the American landscape.

WTI Crude Oil was trading near a high of 63.60 in early January of 2020, before the market began to shudder via foreseeable implications which would hit China economically. As the gauntlet of coronavirus began to sweep into Europe and North America, the commodity began to see its price take a hit. Having achieved almost equilibrium with prices seen one year ago, there are still questions regarding coronavirus and its full implications. Shut downs are still prevalent in Europe and North America, and China is even experiencing a wave of virus outbreaks. However, the psychological environment is vastly different now than it was at the height of coronavirus worries last year. The vaccine and its supposed promise of delivering normalcy will likely continue to serve as a strong foundation for commodity prices, including WTI Crude Oil.

However, the present price levels of the commodity near 52.50 will cause contemplation; speculators will certainly ask what the risk/reward scenarios are that WTI will deliver in the coming month. It is likely that the recent rise in WTI has been strong enough to slow down speculative buying for the next few weeks and a rather polite countermove lower may ensue, which may test support levels.

Traders should expect choppy values in the commodity in the coming month. The bullish trend in WTI has been strong, but it may need time to consolidate within these higher levels it has achieved. Supply seems to be strong and demand remains vulnerable according to petroleum organizations. Speculatively, WTI Crude Oil seems like an opportunistic trading asset in the coming weeks via support and resistance levels which could prove to be adequate ratios to seek short-term reversals.

WTI Crude Oil Outlook for February:

Speculative price range for WTI Crude Oil is 49.40 to 57.50 USD.

Support near the 50.30 level may prove durable, but if it becomes vulnerable, WTI Crude Oil may retest prices below 50.00.

Strong resistance is apparent near the 54.00 level and, if it is broken higher, then it could mean a speculative buying spree may target highs made in the commodity in January of 2020 and the 57.50 mark could become a target.

WTI Crude Oil monthly February 2021

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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