Crude oil price continues its bullish run and a move above $60 should not be ruled out. The market escaped higher after a bullish flag formation and still has more room to go if we consider the measured move of the continuation pattern.
The prospect of the world’s economies coming back from the pandemic-led recession puts pressure on the price of oil. While oil and gas companies have seen declining revenues lately due to the low oil prices, things are about to change if the price of oil keeps the current levels. Brent crude has rallied nearly $8 this year so far and that makes it he best start of the year in absolute terms in more than thirty years.
Last week we learned that the Euro area economy shrank by 6.8% in 2020, the worse economic performance in decades. The United States, in contrast, contracted by only 3.5%, and that gives hopes of a better performance in 2021. As such, higher crude oil prices reflect the increased optimism in a stronger economic recovery.
Crude Oil Price Technical Analysis
The bullish flag measured move points to $60 and beyond and the price action is literally vertical, suggesting a strong market. Bulls may want to remain long for the target with a stop at the previous higher low.
Crude Oil Price Forecast