Crude Oil futures had been on a tear this year, rallying almost 70% off the February lows. The trend has trade sideways for the past month, as traders work to assess economic prospects. The recent trade has been forming a triangle, especially if you view last night’s spike as an outlier (there was talk of big end of the quarter fund buying).
I think it’s likely that this year’s pattern will be a repeat of 2008. Last year saw the yearly high for crude oil made on July 11th at 147.27 (wow, remember that?). It was all downhill from there.
The daily chart is below; I drew the triangle I see on it. The midpoint of the range from the June 23rd low to last night’s high is at 69.88; this is also near the apex of the triangle. Tonight we get crude inventory statistics from the API, and the DOE releases their numbers tomorrow. A build in inventories could be the end for crude oil. The bottom line of the triangle comes in at 69.35 tomorrow, with the shallower trendline at 68.70. Breaking those points could make 2009 look all the more like 2008.
Which way?
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