WTI Crude Oil Forecast: Price Continues to March Higher

There is only one direction you should be trading and that is long.

The West Texas Intermediate Crude Oil market rallied again on Friday to reach above the $82 level. At this point, the market looks as if it is ready to go higher, but we are struggling to find a pullback that we desperately need. If we were to pull back at this point in time, I think there will be plenty of buyers underneath to go into the market and try to find value.

At this point, I expect that the $80 level is going to be a bit of a “floor in the market”, as crude oil will almost certainly go looking towards the $85 level given enough time. We are a bit overextended at this point though, so I think we will eventually get that pullback that offers value, because markets cannot go in one direction forever. The $80 level being broken to the upside was a very good sign, and now it looks like we are trying to continue the overall uptrend, but it is worth noting that the recent inventory numbers in the United States have been bigger than anticipated, which suggests that the situation may be loosening up a bit, but I think that is short term.

If you look at this market from a long term standpoint, the overall supply issue is going to continue to be a major problem, because there had not been much in the way of drilling or exploration during the pandemic when everything else was shut down. Because of this, the market is likely to see the suppliers trying to catch up, and they probably have a lot of work to do before that happens. Furthermore, OPEC has pushed back on any significant attempt to convince them to produce even more, as Saudi Arabia has recently quashed that idea.

The US dollar has been falling, so that has a lot to say as well. You would be wise to pay attention to the US Dollar Index, because if it starts to fall that could also add pressure to the market going higher as well, as crude oil is priced in those very same greenbacks. There is only one direction you should be trading and that is long.

WTI 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.