WTI bullish continuation in play

Key Support: 61.00 – 60.65
Key Resistance: 62.00 – 62.85

Long Term View
After negative crude prices back in April 2020, price in WTI has rallied more than 1,000% and is now rejecting a previous low for a possible continuation.

Historic Negative Prices
Prices in $CL (crude futures) went negative in April 2020 because of the specificity of WTI futures. At expiry, if you are holding a futures contract you have to take delivery of the commodity.

During the pandemic petroleum based products suffer a mayor hit since lockdown measures were put in place and international air travel was halted. This big dip in demand whilst supply (output/production) was at all times high (see US crude oil production chart below) impacted crude prices.
Now imagine trading at expiration. Who would in their right mind want to buy futures contracts on crude oil that day? Remember that if you hold it you have to take delivery of a commodity that is difficult to store (Cushing at capacity) and worthless in the short term due to the high supply but almost no demand in the market.

Markets are an auction, and in this case there were no buyers for that product. Heavy selling hitting every possible bid and swiping all and every order created that scenario.

This is why my preferred product to trade oil is Brent. Brent futures are settled in cash not in the actual delivery of the barrels like WTI.

But in this case WTI has a better risk to reward scenario.

1H Analysis and setup

very simple dip buy at the previous base whilst in a very strong bullish move. We{re targeting the previous highs for a short term trade