WTI crude oil fell to lows challenging the $68,000 level early last Wednesday, but price levels for this commodity were last seen in the last week of June 2023. However, as WTI crude oil fell to this depth, a reversal began to break out. While the commodity rally could technically have been caused by lower prices, the sudden rally appears to have been triggered by the US Federal Reserve’s FOMC statement.
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Traders in WTI crude are sophisticated and hope that a weaker US dollar will boost demand for WTI crude as the Fed has signaled it will be neutral and dovish on future interest rate policy. has increased. WTI crude oil hit a high near 72.730 on Thursday, a level last seen on the 6th.th of December. Admittedly, the rise in WTI crude oil did not spark a bullish parade that generated significant price appreciation velocity, but the commodity rose further on sentiment that a weaker US dollar could help medium-term demand. It will be interesting to see if it is possible.
Bullish traders should take a close look at the medium-term technical chart before deciding to bet blindly on rising WTI oil prices. If you look at the half-year and one-year charts, the commodity remains firmly within the lower price range. In fact, WTI crude oil is still eyeing significant lows. The support level near 68.000 was definitely tested last week. This leaves difficult questions remaining about what will happen to his WTI crude oil this week.
- In terms of risk appetite in global markets, behavioral sentiment remains fairly optimistic, but international oil supplies remain plentiful.
- Although China is still in a difficult economic situation, it still needs crude oil, but oil analysts have to say that China is buying large quantities of crude oil from Iran at discounted prices.
Speculators looking to rally in WTI oil prices this week should keep an eye on the USD 72.500 price. This has proven to be an important resistance since the 6th century.th of December. If this resistance level remains stubborn, oil prices could come under pressure on Monday. WTI crude suddenly attacks and sustaining prices above $73,000 may prove difficult in the short term.
Although US stock sentiment appears to be increasing and US Treasury yields are falling, WTI oil prices have not experienced a significant increase. A shift to the view that a weaker US dollar will drive more demand in the near term may be speculatively too optimistic for short-term traders. Holiday season with reduced trading in all assets including WTI crude oil by the end of this week.
The speculative price range for WTI crude oil is $68.900 to $76.400.
Traders need to remain cautious on WTI oil prices this week. Recently, the ability to climb higher has been interesting. Early trading on Monday and Tuesday could set the tone for how the rest of the week unfolds, but price volatility will be affected as the Christmas holidays approach and trading volumes decline and traders begin to disappear for the holidays. right. Last week’s lows are not surprising given the downward trend in WTI crude oil since late September, when the commodity price was close to $94,000. The rally late last week may be called into question.
While bullish traders may believe there is upside for WTI oil in the medium term, they should note that conditions remain quite troubling in the short term. If oil can move above last week’s high and challenge $73.000, this will get interesting, but sustaining prices above $73.000 and then starting to scramble above $74.000 may prove difficult. . Traders should use risk management wisely in the coming days to protect against volatility caused by recent price increases and potential reactions.
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