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- One of the things that we will talk about in the early part of 2025 is going to be energy.
- After all, energy had been beaten up pretty severely during most of 2024, and this can be plainly seen in the West Texas Intermediate Crude Oil market.
- That being said, the last several sessions have been very bullish, and I think we are onto something here.
Taking further upward pressure to the market is the fact that the Crude Oil Inventories in the United States came in at -1.2 million, suggesting that we are starting to see continued energy demand.
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Keep in mind this year is going to be interesting for America, as the incoming administration is very pro-business, and is likely to do everything it can to spur economic growth. This should drive up demand for energy, as of course the crude oil market is the“life's blood” of economic activity. Because of this, it makes perfect sense that we are starting to see energy breakout, and it's probably worth noting that the spot US Oil contract has broken above the crucial $72.50 level.
The only thing left at this point for the Bears to hang onto is the fact that the 200 Day EMA has offered a little bit of resistance, but quite frankly I don't see any reason why it will hold. If we can break above the highs of the trading session on Thursday, then I suspect that crude oil continues to go much higher, probably aiming toward $80 before it is all said and done. However, it would make a certain amount of sense for the market to pull back toward the $72.50 level again, looking for some type of confirmation on the breakout via a pullback and bounce.
The size of the candlestick is somewhat impressive, and of course traders have come back to work, at least in a certain number, and therefore it does make sense that we would see more activity in this market. After all, I've been saying for weeks that it looks like we are building a basing pattern, and Thursday looks like it does in fact confirm that.
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