WTI Crude Oil Forecast: Oil Continues to Probe the Bottom – 07 February 2023

The West Texas Intermediate Crude Oil market had a little bit of stability on Monday, as we are approaching the bottom of the overall consolidation area that we had been in for a while.With that being the case, it’s very likely that we will continue to see buying pressure just underneath, as we try to determine whether or not there is going to be enough demand for crude oil around the world.I think we’ve got a very difficult set of circumstances to deal with, as global growth is almost certainly going to be hampered by monetary tightening from various central banks.

As the monetary policy tightens, it will drive down economic activity, thereby driving down the need for crude oil. This has been what’s been priced into the market for a while now, but it is worth noting that somewhere near the $72.50 level there seems to be a hell of a lot of buying, or at least a lot of support. If we were to break down below the $72.50 level, it would kick off a major shift in attitude, and could send this market down to the $70 level rather quickly.

On the other hand, if we can take out the $75 level to the upside, we might have a shot at returning towards the top of the range, which means we could go looking to the 50-Day EMA, or perhaps even the $80 area. If we can break above there, then we can challenge the $82.50 level, which has been major resistance recently. All things being equal, breaking above that could change the overall trend but right now we just don’t have enough momentum to make something like that happen. All things being equal, this is a market that I think is still range bound so therefore you have to play it as such. In fact, it really comes down to the question “Has anything changed?” So far, it has not and therefore you have to look at it as such. Keep your position size reasonable and assume that we are going to be range bound for the time being, but as soon as we break out, it will probably be an explosive move so you don’t want to have a huge position on in that scenario.

Ready to trade the WTI/USD exchange rate? Here’s a list of some of the best Oil trading platforms to check out.