Crude Oil Surges Above Thresholds
Crude oil futures posted impressive gains Wednesday, with the West Texas Intermediate (WTI) and Brent benchmarks settling above the psychologically important $50 and $60 thresholds, respectively.
The February WTI contract price surged $2.58 to end the day at $52.36 per barrel. The benchmark traded within a range from $49.80 to $52.58.
“The daily chart for February WTI crude oil shows the significance of the downward-sloping bear trend line,” Jerry Rafferty, president and CEO of Rockville Centre, N.Y.-based Rafferty Commodities Group, Inc., told Rigzone. “This longstanding trend line had contained the market’s trend since October. While we had taken advantage of the trading opportunities to sell against this declining value of resistance, we stated that we would change quickly from a seller to a buyer if prices could break out above this trend line.”
Since October, the market has offered numerous opportunities to buy and sell against the support and resistance levels, noted Rafferty.
“That all changed last Friday when prices broke out above the trend line at 4730,” Rafferty continued. “Since then, we listed 4957 and 5000 as the two closest resistance for possible profit taking. The power of the breakout has proven to be even stronger. We look for prices to challenge the December highs near 5500.”
Settling at $61.44 per barrel was Brent crude oil for March delivery. Wednesday’s Brent price reflects a $2.72 day-on-day increase.
Front-month reformulated gasoline (RBOB) also gained momentum during the midweek session. February RBOB futures gained 6 cents, settling at $1.425 per gallon.