The WTI Crude Oil market continues to gain ground as the Wednesday session was positive as well. We closed just below the $103 level, but it’s now obvious that the $102 level is going to bring in more buyers. Below there, I see quite a bit of support at the $100 level, and I believe that is the “floor” in this market currently. I also believe that we are bouncing around in the previous consolidation area between the $100 level, and the $104 level above. If we can get above that $104 level, fireworks could ensue at that point in time.
It must be understood that energy markets in general are going much higher recently, and of course this transfers over to this particular great of oil as well. Natural gas gained almost 10% during the same session, so we are starting to see a theme here. With all that being said, I believe that buying on pullbacks will be the way to go going forward, and that this market should eventually head towards the $110 level.
Choppy conditions above, but general bullishness ahead.
Looking at this chart, I think that the bullishness should continue and that anytime the market pulled back it should be thought of as a buying opportunity. Quite frankly, I see no way to sell this market until we close well below the $99 level as it would show a significant break down or change in momentum. I believe furthermore that if we can get above the $104 level, not only is it a break of resistance, but is a very strong looking “W pattern”, which of course is a very intense reversal pattern sometimes. Quite frankly, I think one of two things could happen: either the US dollar starts to depreciate, which of course should drive up the value of oil, or the US economy continues to show signs of strength, which will bring up demand. In that scenario, it’s hard to bet against the contract going higher, and as a result I will not do so.
