WTI Crude Oil Forecast: Market Continues to Reach Higher

The reopening trade is essentially what we are betting on when we get involved in this market, due to the fact that we have seen so many countries looking to open up their economies.

The West Texas Intermediate Crude Oil market rallied significantly on Wednesday as we continue to see energy as one of the biggest outperformers globally. At this point, the WTI market is above the $85 level, and it is psychologically stronger as well. If we can break above the top of the candlestick for the session on Wednesday, that should send this market looking towards the $90 level. For that matter, I do think that we will get to the $90 level given enough time, but I also recognize that we may need to find a little bit of value occasionally.

If we do turn around and break down below the $85 level, then the market is likely to go looking towards the $82.50 level. That is an area where we have already seen some buying, and I think it should offer quite a bit of support. Obviously, we are in an uptrend, and I just do not see that changing anytime soon. Yes, we may get a significant pullback in the short term due to US dollar volatility, but I think it is obvious that energy continues to see a lot of inflow, and as OPEC struggles that will only help as well.

The reopening trade is essentially what we are betting on when we get involved in this market, due to the fact that we have seen so many countries looking to open up their economies. Denmark was the latest one, which will demand a certain amount of crude oil, which will have a bit of a “knock on effect” in all grades of crude oil, and as larger economies such as Europe reopen, that obviously will only drive demand further. It should also be noted that OPEC has recently struggled a bit to hit production levels, and that will continue to drive the market higher.

If we do get a significant pullback, I believe that the $80 level is the absolute “floor in the trend” as we have the 50 day EMA reaching towards that area as well. I do not expect to see the market reach down to that level, but I think it is a level to keep in the back of your mind.

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.