WTI Crude Oil Price: Bulls Are Taking OVER!

| April 16, 2015 | 0 Comments

WTI CrudeWTI Crude Oil Price: Bears Are On The Hot Seat!

Anyone bullish of crude oil got a nice surprise yesterday morning.

The WTI crude oil price surged 5.5% after the EIA’s weekly crude storage report was released at 10:30 AM.


The government agency revealed a much weaker inventory build than investors were expecting.

For the week of April 10th, US crude inventories rose by a mere 1.3 million barrels. 

That’s much less than the previous week’s build of 10.9 million barrels.  And while inventories still grew, it’s one of the smallest weekly additions to crude storage facilities in the past two months.

Look at what the news did for the WTI crude oil price…

WTI crude oil price, a chart of crude

As you can see, bulls pushed the commodity above a very important technical resistance area near $54 a barrel (green line).  With this level in the rearview mirror, the door is now open for a possible run to the $58 area- and if we’re lucky… $60.

Not surprisingly, yesterday’s strong crude gains sent energy stocks into orbit…

Too Late To Get In Oil Stocks?

It doesn’t take a rocket scientist to figure out why investors were pouring money into oil stocks yesterday.  With crude breaking out to new multi-month highs, there’s a growing consensus the bottom is officially in for the commodity.

And that means the beaten down oil industry is ripe for a big rebound!

In fact, widely watched oil stock ETFs like the Energy Select Sector SPDR $XLE and the SPDR S&P Oil & Gas Exploration & Production $XOP broke to multi-month highs in yesterday’s session.

Of course, we’ve talked at length about the bullish situation in these oil stock ETFs in recent weeks.  If you remember, I discussed the potential for a big breakout in $XLE and $XOP just a few days ago.

Is it too late to get in?

Investor sentiment towards crude oil and the companies producing it is swiftly changing from disgust to opportunity.  Market participants are suddenly willing to look past stressed balance sheets in hopes of catching a big rebound.

But whatever you do, don’t just throw caution to the wind because oil stocks had a good day yesterday.

As I explained here, you have to be careful when it comes to investing in the US oil industry- especially when it comes to the small- and mid-cap space.  Despite the fact most oil stocks are up strongly the past few days, that advice still holds true.

Listen closely…

I’m undeniably bullish on the energy space going into mid- and late-2015.

But the fact is, you’ll likely get a chance to buy oil stocks at lower prices in the near future.

I wouldn’t be a bit surprised to see a price pullback in $XLE, $XOP, and individual oil names in coming days.

What’s more, I don’t expect the WTI crude oil price to go straight up from here.  There’s still considerable technical resistance and bearish supply factors the oil market has to contend with.

That’s why I expect plenty of volatility for the energy space in coming weeks. 

It’s during the short-term selloffs that you want to establish long positions in oil stock ETFs and individual names! 

Until Next Time,

Justin Bennett

***Editor’s Note***  Subscribers to my flagship commodity ETF investing service, the Commodity ETF Alert, are still sitting on the bullish $XLE position they established in February and March.  At this point, all they have to do is sit back and enjoy the ride.

If you’d like to discover how to establish positions in commodity ETFs before they make their big moves, click here.

BIO:  Justin Bennett is the head commodity research analyst at Commoditytradingresearch.com.  With over a decade of real world trading experience, he finds ways for you to consistently profit from movements in commodities and the companies producing them.  Sign up for our free reports and commodity newsletter at https://commoditytradingresearch.com/free-sign-up.

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Category: Crude Oil, Energy

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.