The WTI Crude Oil markets had a very strong showing during the session on Monday, but remains below the $105 level. The area between the $104.50 level and the $105 level should continue to be resistive, but ultimately I believe that the $105 level will get broken to the upside. When you look at the chart on the daily timeframe, there is an obvious ascending triangle that I have marked on the chart, which measures for a move to the $113 level. With this, the market looks very bullish as far as I can tell, and any pullback at this point time should invite more buyers. I think ultimately we will reach the $113 level, but is going to take some time as per usual.
As far as I can see, the $102 level is the “floor” in this market, and if we fell below there I would suddenly become a bit concerned. This would be even more concerning if we fell below the $99 level, which I see is the absolute bottom of the uptrend. Below there, markets would get very ugly, and we would more than likely enter a bearish market.
Watch the US dollar.
Watch the US dollar going forward, as a fall in the value of it should push the oil markets higher. However, don’t get too caught up on that correlation. Both can go up over time, just depending on what’s going on around the markets.
On top of that, I believe the demand is starting to pick up for energy in general, and as a result I believe that this market will continue to go higher based upon alone. The scenario that I described above as far as breaking down is very far-fetched though, and I truly believe that we will be seeing higher prices throughout the course of the summer. Ultimately, I believe that the market will be a “buy on the dips” type of market, and as a result traders will continue to buy into it time and time again. With that, I believe we have a positive summer, one that ultimately heads to the $115 level.