Crude Oil Price Forecast – Crude Oil Markets Continue to Drift

WTI Crude Oil

The entire idea of the crude oil markets rallying over the last couple of months has been predicated upon two things: stimulus driving up demand, and OPEC producing less oil to supply the market. While both of these have driven the price of crude oil higher, there are questions as to how big the stimulus will be, and the world got a bit of a wake-up call last week as inventory numbers were very bad in the United States. With that being the case, I do believe that it is probably more likely than not that we reach towards the $50 level underneath to try to find buyers. However, we are essentially in the middle of two major levels in the form of $50 and $55 above, so this is a short-term trade at best. Quite frankly, it is probably one that is a bit riskier to take.

Crude Oil Video 27.01.21

Brent

Brent markets have gone back and forth as well and are almost certainly at “fair value.” When you look at the chart, the $50 level has been supported in the past, and the 50 day EMA is now just above the $51 level. Above, we see the $60 level as being important in the past, so one would have to assume that there is a certain amount of “market memory” in that general vicinity. As we are trading just above the $55 level, we are essentially right in the middle and therefore not at the best trading position. That being said, you could make an argument for a little bit of a bullish flag so if we do shoot to the upside a move to $60 makes quite a bit of sense.

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