The West Texas Intermediate Crude Oil market dipped a bit on Wednesday but found plenty of buyers near the $88.50 level to turn around again over the last 24 hours. Keep in mind that the area that held support on Tuesday as well, so it looks like we are at the very least trying to hang on to some semblance of bullish pressure. If we can break above the top of the candlestick for the trading session, then that could send the market much higher. At that point, we will probably go testing the highs of the last couple of weeks, perhaps even opening up the possibility of $95 being targeted.
On the other hand, if we break down below the $88.50 level, then it is likely that we could go looking towards the $86.50 level, followed by the crucial and psychologically significant $85 level. That is an area that has been important a couple of times now, so I would anticipate a lot of value hunters in that general vicinity. It is being driven higher by the idea that the demand of reopening economies will continue to push prices upward. OPEC also is struggling to produce enough to meet quotas at times, so it is very likely we will continue to hear a lot of noise, but then a potential push to the upside every time we do get a dip.
Pay attention to the US dollar, because we have the CPI numbers coming out on Thursday and that will have a major influence on what happens with the greenback. If the greenback starts to fall, then it will more than likely have an influence on the crude oil market as well, as it is priced in the same greenbacks. If the dollar falls, that is bullish for oil overall. However, if the dollar suddenly spikes higher, it could very well take less of those greenbacks in order to buy a barrel of oil. The only thing you can count on is a lot of volatility, but we are most certainly in a significant uptrend, and I do not see that changing in the short term. Take a look at any dip as a potential buying opportunity until the fundamental situation changes.
