Trading position (short-term; my opinion; levels for crude oil’s continuous futures contract): The market is expected to cool off and may provide an entry point at $67-$68 levels this week with a target at $72.3 and stop-loss at $64.54.

The WTI crossed $70/barrel and then pulled back slightly, but the situation is still looking rosy and bullish. Will the prices keep climbing?

Leading banks and analysts believe that there is still a lot of room for upside movement for oil, as the reopening of the economy and the onset of summer will keep pushing demand upwards. All this coupled with restricted production output from OPEC+ and a postponement of Iranian crude addition to the supply makes the current situation look like an attractive bullish market.

The number of Americans flying across the country continues increasing as per TSA checkpoints readings. Sunday's tally was close to a 2 million mark.

Does this mean that the WTI will continue climbing? Well, it is quite likely, but there seems to be a selling pressure at the moment, considering the almost 10% rise in less than 2 weeks. So, before crossing the $70 barrier again, we may see some cooling off, which would provide a good opportunity to enter the market.

China is resorting to destocking activity to avoid paying higher bills for oil as the price rose significantly. The country’s crude import dropped to a 5-month low even though the consumption is increasing.

India will soon restart its economy and end its lockdowns, as the Covid-19 cases are falling across the country. Response of the country to high oil prices is yet to be seen, although India is considering all possible sources apart from the Middle East to get lower prices for black gold.

So, the market is now flipping from a demand-driven market to a supply-driven market, as the overall supply will determine the direction of the price movement.

In summary, oil prices continued the rally driven by rising demand and restricted supply. China and India will respond to higher oil prices by utilizing the internal stocks first.

As always, we’ll keep you, our subscribers, well-informed.

Trading position (short-term; my opinion; levels for crude oil’s continuous futures contract):

The market is expected to cool off and may provide an entry point at $67-$68 levels this week with a target at $72.3 and stop-loss at $64.54

Thank you.

Nishant Jain, MBA, CPSM
Oil Trading Strategist