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WTI Oil Futures Direction – Monthly Candle Chart

Monthly Chart WTI Oil Prices

Last year’s factors of a weak US dollar and technical elements in the chart for daily oil prices which helped to propel the oil price to new heights should not be discounted again this year.  Despite the current battle between bearish energy fundamentals and the global downturn, the increasingly speculative tone of the oil market is prompting traders and investors to view the commodity sector as the one area of the market likely to provide a decent return.   A look at the monthly oil chart as well as COT data for oil can only add to this sentiment as we do seem to be at an important stage of any potential price rally.   The monthly chart for WTI is fascinating and confirms the recent bullish reversal and breakout now seen in the market.  The first thing to note is the long legged doji in January followed by the hammer in February, a strong reversal signal, which is further confirmed by the lows of each month being almost equal suggesting that daily oil prices are rebasing around the $34 a barrel mark.  This month’s candle is confirming the reversal, breaking out above the $50 resistance area and should prices hold above $53 or higher at the close of the month then this will provide a 4 candle reversal pattern which should see prices move higher in April.

Whether last week’s abrupt weakening of the US dollar is to continue will depend, in part, to this week’s release of Q4 GDP figures, personal income data, Durable goods figures and the usual EIA figures on Wednesday.  In addition much is made of the increase in the Cushing stockpile and news released early today confirmed that since late February around 7 million barrels of North Sea oil has been shipped to the Americas owing to sluggish demand from European refiners.  A further shipment of North Sea crude is expected to leave at the end of this month bound for the Gulf of Mexico.   Could it be that the US is simply stockpiling at lower prices in anticipation of an upturn later this year.  The monthly chart oil chart would certainly confirm this view as would the COT data.