Crude Oil Forecast – crude oil markets explode to upside on WednesdayAfter a better than expected inventory number coming out of the United States, crude oil markets shot straight up in the air during trading on Wednesday, pressing major resistance above.
WTI Crude Oil
The WTI Crude Oil market rallied rather significantly during the trading session on Wednesday, reaching towards the $71 level, an area that I see as significant resistance. That resistance area could be broken relatively soon and if it does happen, that could send this market towards the $72.50 level. The inventory was extraordinarily bullish, reporting a drawl down of 5 billion barrels as opposed to the expected 1 million barrels. Needless to say, oil reacted very violently to the upside after that report came out. It shows a certain amount of strength in demand, and with the looming Iranian sanctions, it’s very likely that we will continue to see a tightening of global supply. However, I would wait for some type of pullback to take advantage of.
Brent markets also rallied, pressing the $80 handle. I think at this point I think that it will offer resistance, but at this point it does look like we will manage to break above there eventually. If we do, then I think the market continued towards the $82.50 level and then the $85 level after that. Short-term pullbacks should be buying opportunities, especially near the $79 level that looks to be offering a little bit of a boost. If we were to break down below there, then I would start looking at the $78 level next. I don’t have any interest in shorting crude oil right now, it seems to be far too many bullish from both a fundamental and a technical standpoint over the last several days.