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WTI oil futures set to break above $100 per barrel

daily oil prices on the oil futures chart

WTI – December Oil Futures Daily Chart

An interesting week for crude oil and the WTI contract in particular, which finally appears to have broken out of recent sideways congestion in the $94 to $97 per barrel region, and now appears to have picked up the longer term bullish trend once again. The sideways congestion for WTI oil was clearly defined on the daily chart with two Hawkeye pivots above and two Hawkeye pivots below, and Friday’s price action in the oil trading session, finally saw the December oil futures contract break above the $98.50 per barrel region and end the week at $99 per barrel, having briefly touched the $100 per barrel level earlier in the day.

The break to the upside had been clearly signaled throughout the week with a series of lower highs on the daily bars, always a strong sign, that the breakout would be bullish. In addition ofcourse with Hawkeye, volume on both the daily and three day chart remains firmly bullish, with a bright green heatmap adding to the positive sentiment for crude oil at present. In addition, both the daily and the three day trend remain green, adding further weight and at the start of the week, Hawkeye also delivered a further conservative Roadkill signal, adding to those already delivered.

So where next for daily oil prices? Well, technically of course, the next level is the psychological $100 per barrel which should be breached on Monday, and once clear, then oil prices are likely to test the deep price congestion in the $103 to $110 per barrel area. To push through this area will require considerable momentum, but with the Federal Reserve now intent on weakening the US dollar further, commodities in general and oil in particular should continue to benefit, with a continuation of the recent bullish trend. Indeed with the US dollar index now looking increasingly bearish, and plunging through key support levels on the daily chart, we may see oil prices move far higher in due course, which will no doubt raise the spectre once again of a ‘speculator driven’ trend. I would suggest that Mr Bernanke and his colleagues think carefully before blaming us – after all, QE3 is nothing more than a Ponzi scheme by a another name!

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By Anna Coulling