Crude Oil continues to display immense bullish momentum, which started two years ago, after the dive to $-37.50 in April 2020 when the coronavirus broke out. Since then, Oil prices have only been increasing, despite smaller pullbacks, like the one we saw in the last two months of 2021, as a result of the omicron variant spreading out, especially in China.

US WTI crude Oil surged to $93 last week with moving averages acting as support on the daily chart, while a strong support zone has formed around $62. After the retreat late last year to that support zone, US Oil bounced higher and the uptrend has picked up pace further.

This week we saw a slight retreat which we decided to buy, since sellers weren’t showing much strength in particular. The 20 daily SMA (gray) held as support as well and formed a doji yesterday, which is a bullish reversing signal. Today the uptrend resumed again and the price reached our take profit target, from the Oil signal we opened earlier this week.

WTI Crude Oil Daily Chart Analysis

Oil bouncing off the 20 daily SMA

One of the main reasons for this extraordinary surge has been the excessive amount of cash that has been spent by governments and central banks across the globe. We have seen economic stimulus programmes like never before, worth tens of trillions of USD/Euros. Although, with the global economy in expansion and the coronavirus becoming like common flu, which will mean no more restrictions soon, central banks and governments have stopped the free cash and are now tightening their policies.

But crude Oil is not minding much since the world economy is expanding fast as we mentioned above. So, the demand for crude Oil is high while stockpiles in the largest consuming nations slumped in December, tightening an already stretched global energy market, as the supply of crude continues to lag behind robustly rising global demand. So, expectations from OPEC are that Oil will remain bullish in 2022 as well.

US WTI Crude Oil Live Chart