Crude Oil Price Forecast – Crude Oil Markets Continue Parabolic Move
WTI Crude Oil
The West Texas Intermediate Crude Oil market has recaptured the $63 level during the trading session on Wednesday after selling off overnight. This was due to report by the American Petroleum Institute of a build of 1.026 million barrels, instead of the expected -5.372 million barrels. In other words, the supply is building, not shrinking. Cushing, Oklahoma reported a build of 2.738 million barrels, instead of a reading of -3.034 million barrels. Furthermore, gasoline inventories rose 66,000 barrels, instead of dropping -3.472 million barrels. In other words, almost nothing from a fundamental standpoint worked in favor of crude oil, yet the momentum has carried it higher. The $65 level above could be massive resistance, so I will be very interested in shorting on signs of exhaustion there, as it was a major barrier multiple times in the past.
Crude Oil Video 25.02.21
Brent
Brent markets also did the same thing, but in this grade of crude oil it may make a little bit more sense as stockpiles in European storage hubs are at their lowest level since September. In other words, we may get a little bit of a divergence between the two markets, but at the end of the day both have been extraordinarily parabolic, and therefore quite overdone. That being the case, I do think that the market is going to pull back sooner rather than later, and to be buying up here for anything more than some type of short-term “smash and grab trade” is dangerous to say the least. We have hardly caught our collective breath since moving higher from the $40 level a couple of months ago. Furthermore, if the US dollar starts to strengthen again, that could play havoc in this market as well. I believe that major resistance is to be found near the $70 level.
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This article was originally posted on FX Empire
