17th November - Oil, fundamental obstacles in the way of bullish charts
The detail of that H&S chart pattern is clear: the break up through the neckline, the push through the Prior High at 55.24 all point to a minimum move up to possibly $100. Only a failure back through the neckline currently beneath the market at $51.5 would change this bull outlook.
But in this new era of plentiful US oil and Gas production Saudi Arabia/OPEC and Russia would need to cut very deep into their own output to drive the oil price significantly higher and we doubt very much they would be prepared to do that for very long. From a purely fundamental standpoint we judge that the oil price has likely peaked for now and a price range of US$40-60 is now likely to dominate.
Unless something changes...
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