WTI Crude Oil Forecast: Price Continues Breakout

I look at this as a “buy on the dips” scenario, and that will be the way going forward.

The West Texas Intermediate Crude Oil market rallied on Friday after initially falling. The market pulled back to test the $115 level for support, perhaps offering a bit of opportunity. The $115 level would be supported based on the fact that it was previous resistance in the shape of an ascending triangle. Furthermore, the ascending triangle measures a $15 move. In other words, if the entire move is fulfilled, it’s possible that we could go to fresh, new highs.

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When you look at this chart, it’s obvious that there are plenty of buyers underneath every time we dip, just as we had seen during the session on Friday itself. Looking at this chart, I have no scenario in which I would be a seller in this market, but if we broke down below the tail of the Thursday candlestick, it could open up the possibility of the $110 level being an area where buyers step in, followed by the 50-day EMA. It’s not until we break down below the uptrend line that I would be a seller of this market, which is near the $103 level.

With the reopening of China, there should be plenty of demand for crude oil, as the market has been waiting for this. Ultimately, the volatility should continue to pick up, and there’s also the issue of Russian oil being sanctioned by the West. Because of this, the market is likely to see plenty of bumps along the way, but it is more likely than not only a matter of time before we go higher. Breaking above the $120 level will kick off the next leg higher, which is all but a foregone conclusion at this point.

Inflation is typically felled in the energy markets first, and that’s been part of what we’ve seen. Inflation continues to be a major issue, and I think we will continue to see a bit of a feedback loop come into the picture. The candlesticks for the last couple of days certainly show that there are plenty of people willing to get involved, and I just don’t see how that will change anytime soon. I look at this as a “buy on the dips” scenario, and that will be the way going forward. The $130 level almost certainly will be targeted sometime this summer.