Oil price doubles in less than six months
The oil price has left it’s February low and begun a strong uptrend. Analysts expect it to head towards US$ 85 per barrel at the end of the year. Many analysts suggested that enormous 2008 uptrend was a spike and that it was likely that the oil price would stay low after the 2008 downtrend. They were wrong. Looking at a Dinapoli technical analysis of the July 2009 oil future we see a strong upward trend again. The same kind of trend we saw last year when the oil price rocketed sky high. This type of trend suggests a much higher price increase on the short term with maybe some resistance at 70 and 87. If in the next month the oil breaks the US$ 70 resistance level, it’s likely that it will continue the trend to US$87 in a few months from now where it will meet resistance again.
At the same time we see the dollar losing against the euro (chart below) and the sterling in another strong trend, which means more bad news to the US economy in Q3 and Q4.
It is likely that we will see renewed interest for biofuels this summer. Stay tuned…
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