WTI Crude Oil Forecast: Price Smashes Through $80 Level

Christopher Lewis

At this point, it looks like we have much higher prices ahead regardless of what happens next.

The West Texas Intermediate Crude Oil market rallied again during the day on Monday, smashing through the $80 level. The $80 level is a psychologically important level, and an area that has mattered in the distant past. We continue to see a lot of concern when it comes to the supply of crude oil around the world, and I do not see that changing anytime soon. The West Texas Intermediate Crude market is no different than any of the other grades out there, as we are running out of supply.

Underneath, the $80 level should be somewhat important, as it is a large, round, psychologically significant figure and an area that has been thought of as a potential resistance barrier. If we break down below the bottom of the candlestick during the trading session on Monday, then it is possible that we will go looking towards multiple support levels underneath.

For example, there is the gap from the open on Friday, which will more than likely have to get filled sooner or later. Even if we do not get down there, I still believe that dips will be bought into. Even breaking down below there then would have the market looking towards the $75 level, where I would see a significant amount of support just waiting to happen. After all, it was previous resistance, and now it should continue to be important.

The 50-day EMA is curling higher from here, reaching towards the $72.50 level and likely to go looking towards the $75 level after that. The market will look at that as the absolute bottom of the uptrend, and a reversion to the mean is a potential move, but regardless I am not looking to sell. If we break above the top of the candlestick for the trading session on Monday, I can also be a buyer at that point, as we are looking at the $85 level as a target. We are in an uptrend, and we have to worry about the supply chain. Beyond that, we are starting to see a lot of concern when it comes to power generation, meaning that a lot of plants around the world will start switching over to petroleum for energy as well. At this point, it looks like we have much higher prices ahead regardless of what happens next.

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.

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