WTI Crude Oil Forecast: Crude Oil Continues to March Higher

Christopher Lewis

It is obvious to me that we are starting to see this market get way ahead of itself.

The West Texas Intermediate Crude Oil market has completely ignored poor inventory numbers during the early hours of the Thursday session in order to turn around and show signs of strength. This ultimately is a market that will continue to see a lot of upward pressure based upon a whole host of fundamental reasons. However, one has to note that we are more likely than not getting to the point where we are overdone.

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After all, momentum can only carry a market for so far and it is obvious to me that we are starting to see this market get way ahead of itself. After all, there are only so many buyers out there. That being said, there are plenty of fundamental reasons to think that this market goes much higher over the longer term, so I do not have any interest in shorting this market or trying to make a “countertrend trade.” That is a great way to lose a lot of money and therefore I have learned of the years it is not worth it.

The fundamental reasons of course include the fact that OPEC is struggling to pump out as much oil as thought, and then of course you have to worry about the trouble with Russia and Ukraine, as well as a pipeline catching fire between Iraq and Turkey. This is a market that has faced a lot of noise as of late, so I would be perfectly comfortable with some type of pullback as it would make quite a bit of sense. The market could very well see a situation where we drop towards the $85 level and find buyers, or we may even drop as low as $82.50. Either way, any type of supportive candlestick underneath offers an opportunity as far as I can see, and I would use it as an opportunity to get long again.

Alternately, we could end up breaking out above the highs again and simply going parabolic. I do not like that move, although it is definitely in the right direction. I would be much more comfortable with some type of pullback as it gets more people involved in the market. Simply “chasing the trade” at this point in time would be a great way to lose a lot of money. After all, we could be down three dollars one day without much change in this trend.

WTI Crude Oil chart today

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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