As with many other commodities it was last Thursday’s price action which was also significant for crude oil and, in particular, the February WTI contract which closed at $95.49 per barrel having initially opened at $94.19, before finally breaking through the $95 per barrel area.
The contract had been trading in a narrow since the start of the year clearly defined by isolated pivot lows in the $93 per barrel price area and an isolated pivot high at $94.46 to the upside. This area of price congestion is now an excellent springboard for a further move higher for crude oil and we can expect to see a run on towards the psychological $100 per barrel region in due course with Friday’s inside bar adding further momentum.
Moving to our indicators, buying volumes on the daily chart have remained both bullish and strong, supporting this current move with both the daily and three day trends also remaining firmly green. The only caveat to the current bullish momentum is on the three day chart where volumes have returned to no demand but this could also be consistent with the contract due for rollover as buyers move into the March contract.
By Anna Coulling