Key Talking Points:
- Technical outlook remains positive into 2021
- The weekly chart points to a key resistance area
- Relatively low volatility would support oil prices
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There’s no doubt that 2020 has been a year full of unexpected occurrences, and oil trading negative back in April is probably somewhere at the top of the list for most commodity traders around the globe. Since then, the price of a barrel of WTI crude has seen an impressive 570% growth, but prices remain far from their equilibrium as demand struggles to recover to the levels seen before the outbreak of the coronavirus pandemic.
Looking ahead, the Crude Oil outlook for the start of 2021 has improved from the less optimistic output for Q4 2020, but significant challenges still remain. The rebound seen at the beginning of November on positive vaccine news has set the tone for continued upside momentum, and the technical picture hints at possible gains in the next few months. On the daily chart, crude oil has pushed above the 61.8% Fibonacci level from the 65.47 to 7.55 retracement at 43.35, a key inflection point since the attempted recovery from the coronavirus lows seen in March.
Crude WTI Daily chart
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— Written by Daniela Sabin Hathorn, Market Analyst
Follow Daniela on Twitter @HathornSabin