The energy futures used for electric power generation has been bullish since early 2021, among which WTI rose by almost 70%; natural gas futures jumped by 114%; coal futures increased by 100%, due to the rising energy demand driven by economic recovery. However, the OPEC members are still reluctant to raise oil production in line with the market demand, resulting in a bullish energy market for supply falls short of demand. Most analysts reckoned that oil prices would probably rise in the future. Most importantly, the recent two news are stupendously favorable to a bullish oil price outlook.
Firstly, the US congress finally passed the trillions of dollars worth of infrastructure plan supported by Biden government vigorously. Once the large infrastructure projects start, the demand of related base metals and crude oil will sharply increase, absolutely conducive to the outlook of WTI.
Secondly, Pfizer Inc. and Merck & Co. announced last week that they had developed successfully the oral antiviral pills, which can reduce the cases of severity and mortality by 89%, showed by the clinical trails. If the pills are approved to use, it is believed that the pandemic is more likely to come to an end, bringing back the economy, which is estimated to boost the airline industry and tourism. Hence, the demand of crude oil is expected to rocket in the future.
In addition, meteorologists all over the world estimate that there will be a colder winter this year, leading to a further increase in the demand of energies used for heating including crude oil, natural gas and coal, in the Northern Hemisphere. It will push up the related energy futures prices. Supported by these favorable news, WTI is forecast to cease its recent adjustment.
Technically speaking, December WTIs resistance above the short line ranges from $84.88 to $85.41. Stimulated by the positive news above, December WTI is more likely to break upward and challenge the resistance level at $85.93 and $88.88 respectively. If breaking through the levels again, it will further reach the level of $100, as estimated by the market.
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