WTI Crude Oil Forecast: Has Sluggish Thursday Session

 If we break above the 50-Day EMA, it does open the possibility of reaching the $85 level, but I don’t necessarily think that’s going to be the easiest path to take.

• The West Texas Intermediate Crude Oil market has gone back and forth during the session on Thursday, as we continue to see a lot of noisy behavior just below the 50-Day EMA.
• The $80 level sits just above there as well, so that’s probably worth paying attention to also, as the market will almost certainly have to deal with a lot of resistance.
• Having said that, we are more likely than not to see a lot of Brownian motion, which is a lot of nothing between now and the end of the year.

Advertisement

Quite frankly, if you are trading at this point in the year, shame on you. The liquidity is broken, to say the least, and most major players, including commercials, are out of the market right now. As we head into the new year, we will have to determine whether the market is trying to go higher or lower, but right now I think a short-term bounce does make a certain amount of sense. If we break above the 50-Day EMA, it does open the possibility of reaching the $85 level, but I don’t necessarily think that’s going to be the easiest path to take.

Market Likely to Go Lower

On the downside, if we break down below the hammer from the session on Thursday, then it’s likely that the market drops down to the $75 level, possibly even the $70 level. The $70 level offered a major base and support level recently, so if we were to break through that it would be bad news for the oil market to say the least. I think at this juncture, you are looking at a very back-and-forth and sideways market that is trying to find its way, so remember that the liquidity will cause the market to do some strange things, but until global growth changes its outlook, I just don’t see how you get overly bullish on crude oil or any other energy for that matter.

There is a structural problem with supply, but the demand is falling off a cliff, kind of wiping that out. At this point, I think we do go lower, but I also recognize that most of the easy money has been made on the downside now. After all, now that the Biden administration is going to replenish all of those votes it bought by releasing the Strategic Petroleum Reserve, the United States will come in and support this market sooner rather than later.

Ready to trade our WTI Crude Oil Forex? We’ve made a list of the best Oil trading brokers worth trading with.