Oil prices have been surging this week, with both Crude and Brent oil moving to their highest trading level in three years due to growing expectations the natural gas crisis will cause other commodities to rally.
Seasonal spending is also set to boost oil demand, especially the run-up to Christmas, meaning that s further global economic recovery is likely to boosts demand for Brent and Crude oil.
The strong rally in both Crude and Brent oil comes as businesses and consumers increase their usage due to global governments lifting social curbs imposed to slow the spread of coronavirus.
Goldman Sachs also said it expected the rally to continue, not that demand had recovered “even faster” from the impact of the Delta coronavirus variant than anticipated, and that global supply remained constrained.
The charts surrounding Crude oil is also very bullish right now and is even predicting further massive price gains. A huge, inverted head and shoulders pattern formed this week, with the pattern predicting gains towards $90.00.
Looking at sentiment metrics it thinks a case can be made for more gain as bullish sentiment amongst retail participants, whom are often on the wrong side of major price breakouts, is still not to bullish.
According to the ActiveTrader market sentiment tool some 59 percent of traders are bullish towards crude oil, leaving plenty of scope for further upside in Crude oil.
We should remember that Crude has already by over $10.00 from the lows of the summer, so sentiment is still not “euphoric” meaning further strong price gains are still very possible.
Crude Oil short-term Technical Analysis
The lower time frames currently show that crude oil is forming an extremely large, inverted head and shoulders pattern. The pattern will be activated if crude oil rallies through the $66.50 level.
According to the overall size of the bullish pattern crude oil rally towards the $80.00 price area, which would mark a major new multi-year high for crude.
See real-time quotes provided by our partner.
Crude Oil medium-term Technical Analysis
The daily time frame shows that a much larger inverted head and shoulders pattern has now formed, following the recovery back towards the October 2020 trading high.
This pattern has a massive price target above $90.00, however, it should be noted that it unclear whether Crude can actually rally above $100.00, but $90.00 is certainly indicated.
See real-time quotes provided by our partner.
© 2019 High Leverage FX - All Rights Reserved.
© 2019 High Leverage FX - All Rights Reserved.