Crude Oil Forecast: Finds Buyers On Every Dip
Date
10/2/2023 2:21:25 PM
(MENAFN- Daily Forex)
crude oil markets have shown strong resilience and upward momentum as we approach the weekend. The bullish trend that has gripped the market appears to be tenuous at the moment, as we started selling off later in the day. That being said, we are still very much in an uptrend.
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The WTI Crude Oil market had a robust trading session on Friday in the beginning, with buyers continuing to dominate. However, the market gave up those early gains as it looks like there is a lot of fear out there. However, the key driver here is the substantial demand for crude oil coupled with a notable shortage of supply. The recent move by the United States to deplete its Strategic Petroleum Reserve indicates the nation's commitment to support this market. Additionally, significant production cuts from major players like Saudi Arabia and Russia are contributing to the market's strength. Furthermore, the presence of inflation tends to benefit crude oil in the long term. Given these factors, it seems likely that we will witness a push towards the $95 mark, and potentially even higher.
The Brent crude oil market also saw gains during Friday's trading session, only to turn around and sell off later in the day. Any rally at this point hints at a possible breakthrough above the $95 resistance level. This level has historically posed a significant challenge, but the market appears poised to overcome it. Should this happen, it opens the door to a potential climb towards the coveted $100 mark. On the downside, the $90 level remains a solid support zone, and any breakdown below this point may prompt a closer look at the 50-day Exponential Moving Average.Avoid Selling the Market
In light of the current bullish sentiment in the market, it's not advisable to consider shorting crude oil. Instead, it might be more prudent to wait for opportunities to buy at a reasonable value. Crude oil seems set to continue its upward trajectory, and an improving economic outlook could further fuel this rise. In essence, the prevailing circumstances offer little reason to anticipate a significant and sustained drop in oil prices.
In conclusion, the crude oil market is displaying remarkable strength, and the outlook remains optimistic. Patient investors should keep a close watch on position sizing while capitalizing on buying opportunities during market rallies. With various factors aligning in favor of crude oil, it seems we are in a situation where opportunities will continue to abound. This is not a market that I will be selling anytime soon. After all, the physical supply constraints will continue to be a major factor, and oil prices tend to rise during inflation regardless of all else.
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