Two Reasons For Massively Bullish WTI Crude Oil


Today, the WTI Crude Oil traded both sides. Earlier today in the Asian and European trading sessions, the crude oil plunged to a low of $49.86 and reversed right after we closed our sell position manually though in profit. Later it proved to be a very good decision as we remained quite lucky and came out of the market with a reversal setup. Later the crude oil soared sharply without giving sellers a second chance to come out of the market in profit.

crude oil fieldsWTI Crude Oil Fields

 

Major Reasons Behind Massive Buying

First, the economic events released by the world’s top oil consumer remained consistent with expectations. Specifically, the factory orders advanced 1.0% from the previous month. Additionally, trade balance figures remained positive, which means that the U.S exported more than they imported in the past month.

Based on these positive trade balance figures, investors increased their bets on the crude oil. Theoretically the United States, being the top consumer of crude oil, will increase demand for the oil in order to meet their production demands.

Secondly, the massive bullish trend initiated due to reversed technical outlook. On the hourly chart, the crude oil formed a bullish engulfing candlestick pattern around $49.95. That was one of the areas where I decided to come out the market.

Nevertheless, the oil is trading around $51.50 and it has reached a resistance level of $51.50. Moreover, we can see the RSI (above 70) is signaling that buyers may get exhausted very soon.

ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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