Stephan Schork, president of the Villanova, Pennsylvania based consultants.
“At this point it is now hard to argue against a retest of the highs from early May,” Schork said today in an instant message. Crude traded near a one month high after rising yesterday as U.S. equities gained, bolstering speculation fuel demand will increase. The contract for July delivery was at $76.92 in electronic trading on the New York Mercantile Exchange, down 2 cents, at 10:57 a.m. Singapore time. Futures have gained more than 9 percent in the past year.
Oil earlier this week was trending in the middle of two Bollinger Bands, indicating it may be “make it or break it time for the bulls,” Schork said in a note yesterday. With prices having advanced, the market may push toward the 100 day moving average, which is at $78.39 a barrel today, before the upper Bollinger Band at $79.18. The nine day Relative Strength Index also shows oil is “neither overbought nor oversold,” signaling short-term trends may be sustained, according to Schork.
“We have switched our bias to bullish on crude oil after concerns about offshore drilling and potential weakness in the dollar align to create significant upward potential despite an abundance of supply,” he wrote yesterday.
Via Bloomberg News