The West Texas Intermediate Crude Oil market went back and forth on Wednesday as we are dancing around just below the $90 level. We also have the OPEC meeting going on at the moment, and it makes sense that the markets are a bit skittish. That being said, there is a lot of support underneath, and it does make sense that we will see buyers jumping in, especially near the $85 level, as it has been a significant resistance previously.
If we break down below the $85 level, it is not a big deal due to the fact that we are in a major uptrend, so I look at any pullback as a buying opportunity, and I do not have any interest whatsoever in shorting this market as the trend has been so strong and there are a lot of fundamental reasons to think that we will continue to go higher. After that, the market recognizes the fact that we are in the midst of the reopening trade, and demand for crude oil will continue to pick up. Beyond that, OPEC has struggled to hit its own self-imposed production quotas, so there is going to continue to be a bit of an upward tilt.
Having said that, we are overextended, so a pullback would make sense. Beyond that, the market working off some of the froth is a healthy thing to do as it has been a shot straight up in the air since the beginning of the year. The market breaking above the $90 level would be a very strong sign, and I think at that point we will start to look at the $100 level as a target, something that I would anticipate seeing around June. That being said, we will not go straight up in the air forever, so we will get the occasional slowdown. While oil seems to be sluggish, when you step back and look at the longer-term chart, it is clear that we have a lot of buying pressure, so that is how you have to look at this situation. Regardless, I have no interest in shorting the oil market anytime soon, unless the fundamental underlying attitude and indicators change.
