Crude Oil Price Outlook – Crude Pulls Back a Bit at Extreme Highs

WTI Crude Oil Technical Analysis

The West Texas crude oil market has pulled back just a bit from the $78.50 level, an area that of course has been important multiple times in the light crude oil market. With this, I think it’s just a simple pullback from an overextended run, and I do think that this will eventually offer a nice buying opportunity.

I’d be particularly interested in anything that gets anywhere near the 200-day moving average, but that’s so far from here now that I’m not expecting that. I might be looking at $76 as well. I’m just going to let the market pull back a bit and then bounce to show that it’s ready to go in the other direction. I have no interest in shorting oil.

Brent Crude Oil Technical Analysis

Brent is pulling back from the crucial $82 region, and it looks very much the same as WTI crude oil, as you would expect, with the 200-day EMA underneath offering a massive support just below the $78 level. This one probably has a better shot at reaching the 200-day EMA, but as both markets will move in the same direction overall, I’m looking to see one of them bounce a bit and then perhaps play the opposite market using maybe Brent as a signal for West Texas Intermediate or the other way around.

All things being equal, I think both of these go higher. I think inflation is an issue and I think it’s going to make oil expensive. Furthermore, with all of the stimulus around the world that’s coming, it’s very likely that oil will continue to be fairly strong. We have bounced from a major floor of the last couple of years in both grades of crude oil, so this makes sense from not only a fundamental standpoint but also a technical one.

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