Oil markets displayed bullish momentum once again during Thursday's trading session, driven by a confluence of factors, including mounting inflation concerns and ongoing production challenges.
Top Forex Brokers
The West Texas Intermediate (WTI) Crude Oil market observed a modest rally on Thursday, edging closer to the psychologically significant $90 threshold. While a minor retracement may be in the cards, the prevailing sentiment suggests that this level is poised to be breached in the near future. This optimism stems primarily from the looming specter of inflation.
Market participants have embraced a "buy on the dips" mentality, particularly following a breakout from a bullish flag pattern. Key support levels, notably the $85 mark and the 50-day Exponential Moving Average, underscore the risk associated with selling in this market. The commitment of major oil-producing nations, including Saudi Arabia and Russia, to production cuts, combined with American efforts to replenish the Strategic Petroleum Reserve, further solidify the bullish outlook.
Similarly, the Brent crude market experienced an upswing, inching closer to the $92.50 level. Surpassing this level would set the stage for the next target at $95. Mirroring WTI's performance, Brent recently broke free from a small bullish flag pattern, diminishing the appeal of viewing pullbacks as selling opportunities. The $90 level, situated below, acts as a formidable support zone, fortified by both psychological significance and its position within the flag pattern.
The Market Remains Sensitive to Supply Dynamics
- Supply dynamics continue to exert a significant influence on market sentiment, with several major oil-exporting nations maintaining production cuts.
- The ongoing uncertainty surrounding Russia's willingness to cooperate further adds an element of unpredictability to the supply equation, and this issue is expected to persist throughout the year.
- Keeping a close eye on the US dollar remains prudent, as abrupt spikes in its value have the potential to trigger market reversals.
In summary, the crude oil market is currently riding a wave of bullish sentiment fueled by mounting inflation concerns and intricate supply dynamics. While the immediate challenges lie at $90 for WTI and $92.50 for Brent, the pervasive "buy on the dips" mindset suggests that these levels are likely to be overcome in the near term. Key support levels, including the $85 mark and the 50-day EMA, bolster the overall bullish stance. Nevertheless, the market remains sensitive to supply dynamics and the potential impact of currency fluctuations, making it a space that warrants vigilant monitoring in the coming months.
Ready to trade our WTI Crude Oil Forex? We’ve made a list of the best Forex Oil trading platforms worth trading with.