The prices of crude oil have begun to rise continuously as investors continue to worry about the ongoing situation in the United States. There is no doubt that the COVID-19 situation has worsened once more and the rate of hospitalizations has started to rise again.
Hopes are high that a COVID vaccine will get approved soon, and that can help in reversing the restrictive pandemic measures in the United States. Nonetheless, for now, the event is somewhat leaving some bad influence on oil demand. Thus, the oil market is experiencing corrections.
It is critical to note that this time around the pandemic situation might not influence the oil prices like previously. But, traders must acknowledge that the prices of oil are not likely to crash to the level that was seen earlier in the year. It means that the current pullback may be the opportunity that most of the traders in the crude oil market have been waiting for for a long time.
Turning to technical analysis, the price of crude oil is retracing back towards its 50-day SMA on the daily charts. The current move took the price of the market too far and too fast. The crude oil price may likely plunge below the 50-day SMA since the price has tested this average not long ago.
Nevertheless, the bulls can remain hopeful since long WTI continues to trade above the 100 and 200-day SMA on the daily chart. The nearest support for the crude prices has formed at $41.50, and the resistance has formed at $47.