Created on December 27, 2024

• In my daily analysis of the commodity markets, the West Texas Intermediate Crude Oil market has caught my attention.
• The WTI Crude Oil (US Oil) market has been going sideways for some time, and I think this might end up being one of the more interesting trades in the early part of 2025.
• That being said, this is a market that also needs some type of reason to get going.

From a fundamental analysis standpoint, there are concerns about whether or not demand will be strong enough to warrant higher pricing, but I do think eventually demand does pick up. Keep in mind that the central banks around the world continue to loosen monetary policy, and eventually that should have some type of influence on business expenditures. If the economy starts moving again, the first place that you see benefit from it typically will be the crude oil markets, as energy of course is necessary for the economy to get going, especially when you’re talking about international trade.

Technical Analysis

The technical analysis for this crude oil market is fairly neutral at the moment, but it is worth noting that we are hanging around the crucial 50 Day EMA. The $72.50 level above is a significant amount of resistance and breaking above that would obviously be a major victory for the bulls. The 200 Day EMA sits just above there, and I do think that is going to be a bit of an issue. On the other hand, to the downside we have plenty of support near the $67 level, and then again at the $65 level. When you look at the longer-term charts, the $65 level is a major support level going back at least a couple of years. This suggests to me that perhaps we are getting close to bottoming completely, and now we are just waiting for some type of fundamental reason to continue going higher. I think we get that sooner or later, but again, I think this is probably a story for 2025.

In the meantime, I think a lot of traders are just simply buying the dips and taking advantage of “cheap barrels of oil” anytime they get the opportunity. However, I don’t know that many people out there are confident enough to hang onto their long positions, and that might be part of what we are seeing play out on the charts.

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