Crude Oil Forecast: Looks Strong But Needs A Pullback

(MENAFN- Daily Forex) Crude oil markets showed a somewhat subdued performance on Monday, which seems reasonable given their recent impressive ascent. It's been a bit overdone lately, therefore I think it is probably only a matter of time before value hunters come into the picture.

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The West Texas Intermediate Crude Oil market had a rather uneventful day on Monday, reflecting a degree of balance in a market that has surged significantly. It's not necessarily signaling the end of the uptrend, but a pullback appears to be a logical move. There are several attractive entry points beneath the current levels, notably the $87.50 mark, positioned right in the midst of the consolidation we've been striving to break out of while steadily pushing higher.

Even if we experience a drop from there, the $85 level holds notable appeal, and there's no imminent indication of a downtrend emerging. The continued production cuts by OPEC members, including Saudi Arabia and Russia, maintain a tight grip on supply, supporting oil prices.

The Brent Crude Oil market, while showing some stagnation, maintains a slightly more bullish outlook than its WTI counterpart. Nevertheless, the market seems poised to sustain upward pressure over the long term. The remarkable ascent we've witnessed may soon prompt a pullback, drawing in more buyers eager to participate in a trade that has yielded substantial profits this year. Presently, it appears that the market is determined to fulfill the "measured move" of the bullish flag pattern indicated on the chart.Shorting this Market is Not Appealing
  • In essence, shorting this market holds no appeal, and there seems to be no shortage of buyers willing to engage in this dynamic.
  • While there's an expectation of ample buying interest during pullbacks, it's prudent not to chase oil prices too aggressively.
  • The market's recent rapid advance suggests that waiting for a reasonable pullback might be a more strategic approach.

In conclusion, the crude oil markets may have displayed a lackluster performance on Monday, but their recent remarkable journeys underline their potential. A pullback seems a rational move, offering attractive entry points. The ongoing production cuts by key players keep supply tight, reinforcing the overall bullish sentiment. However, a measured and patient approach to entering the market is advisable, as chasing prices excessively might lead to extended waiting periods for a suitable pullback.

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