Charting Outlook: Major breakout underway for WTI Crude Oil
WTI crude oil has a major breakout from a base underway. Not only did the rally through $52.00 complete a huge head and shoulders base, it also completed a bullish ascending triangle that has been forming since the summer. Initial resistance has emerged near $54.00 with its next zone of congestion in the $57.50 to $61.50 area.
A number of factors have come together to support oil price gains. For over a year the price has been capped by concern that a move well into the $50s could bring US share production back on stream. Recently sentiment has changed with traders and agencies now thinking the tipping point could be closer to $60. Meanwhile, falling US inventories indicating a robust US supply/demand situation has provided fundamental support through the ups and downs of OPEC negotiations.
If OPEC and non-OPEC producers can keep to their agreements and if Saudi Arabia is serious about finally fixing the oil market, the price could attract additional support.