Crude Oil Outlook: Oil, Covid-19, Key Levels

Oil Forecast: Talking Points

• Crude oil prices extend gains as vaccines support demand for travel
• US Crude (WTI) testing a key level of resistance, can demand force a break?
• Will increasing covid cases boost demand for safe-haven Dollar?

With the Omicron (latest Covid-19 variant) variant weighing on investor sentiment, a series of technical and fundamental items have continued to impact sentiment for oil and commodities as a whole.

However, with the release of the Pfizer and Biotech announcement suggesting that a third shot will assist with immunity against the latest variant which has resulted in an array of additional measures.

Oil – US Crude (WTI) Price Action

After pricing in the fundamental factors which remain at the forefront of risk sentiment, oil prices have retraced back towards a key Fibonacci level of a historical move (2001 – 2008).

Although factors such as inventories, the reduction of carbon emissions and demand for oil are likely to continue to catalyze with the price action for the foreseeable future, technical inputs suggest that price has been respecting historical levels and may continue to do so in the near-term.

US Crude Oil (WTI) Weekly Chart

Chart prepared by Tammy Da Costa using TradingView

Meanwhile, from a shorter-term perspective, the $70.00 historical level is likely to continue to withstand buying pressure. In addition to that, trendline resistance may stay firm, at least for now.

How to Trade Oil: Crude Oil Trading Strategies & Tips

US Crude Oil (WTI) 4-Hour Chart

--- Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707