Crude Oil Forecast: Oil Markets Surge Amid Supply Concerns

Unless demand contracts or supply increases substantially, the bullish outlook for this market is expected to persist.


Crude oil markets witnessed another robust rally during Friday's trading session, driven by persistent concerns over supply constraints. Furthermore, the Russians have now determined that they will ban exports of diesel due to the upcoming wheat harvest. This cannot but have ripple effects throughout the entire energy sector. The markets will continue to look for higher levels, but also will continue to see a lot of volatility.


West Texas Intermediate Crude Oil Market

  • The West Texas Intermediate Crude Oil market displayed significant gains on Friday as traders continued to fret about supply shortages.
  • This sentiment has been underpinned by production cuts from major players like Saudi Arabia and Russia, which have significantly impacted the market.
  • Moreover, crude oil tends to perform well in an inflationary environment, as investors seek refuge in tangible assets rather than currency.

The pivotal $90 level carries substantial psychological significance, bolstering the belief that the market is poised for further upward movement. While a short-term pullback remains a possibility, it is likely to be perceived as an opportunity for market participants to engage. Presently, the focus is on the broader uptrend, with a view toward higher prices in the future.

(Click on image to enlarge)

WTI Crude Oil chart


Brent Crude Oil Market

  • Brent markets have also demonstrated a notable upward surge, indicating the potential to breach the $95 level.
  • Given current conditions, traders are on the lookout for buying opportunities, shorting this market make an unattractive prospect.
  • Buying pressure consistently emerges whenever minor dips occur, further cementing the notion that selling is not a viable strategy.

In this context, it is prudent to acknowledge that while a significant drop is possible, the $90 mark appears to be the lower limit for the foreseeable future. The ultimate target for Brent could extend to $100 or even higher. Consequently, momentum is expected to build over time. However, caution is advised, and value-based opportunities should be seized when they arise. This approach is widely adopted by professionals in the current market environment.

(Click on image to enlarge)

Brent Crude Oil chart

In conclusion, crude oil markets are surging due to ongoing concerns about supply limitations. The WTI Crude Oil and Brent markets both reflect this sentiment, with the potential for further gains in the future. The $90 level is a significant psychological marker, and market participants are keen to exploit any dips. Unless demand contracts or supply increases substantially, the bullish outlook for this market is expected to persist.

More By This Author:

Gold Forecast: Uncertainty Amidst Interest Rate Fluctuations
Natural Gas Forecast: Patience Key in an Accumulation Phase
Trading Support And Resistance - Sunday, Sept. 24

Disclosure: DailyForex will not be held liable for any loss or damage resulting from reliance on the information contained within this website including market news, analysis, trading signals ...

How did you like this article? Let us know so we can better customize your reading experience.


Leave a comment to automatically be entered into our contest to win a free Echo Show.