Tullow Oil Share Price Forecast as Oil Prices Surge
The Tullow Oil share price popped on Monday as investors reflected on the rising crude oil prices. The stock jumped by more than 7% and closed the day at 51.22p, which was its highest level since July 14.
Crude oil prices rise
Tullow Oil is a relatively small oil and gas company that specializes in emerging energy markets like Kenya, Uganda, and Guinea.
Like other oil and gas companies, the firm makes most of its money when oil prices rise. Therefore, the company’s share prices is holding steady as the price of crude oil rose to the highest level in three years.
Brent, the global benchmark, increased to $80 per barrel while the West Texas Intermediate (WTI) rose to more than $76. This is a remarkable performance considering that prices dropped to below zero in 2020.
The rising oil prices mean that Tullow could continue its momentum in the second half of the year. Earlier this month, the company said that it had turned a profit in the first half of the month.
Tullow Oil share price forecast
The daily chart shows that thr Tullow Oil share price was previously forming a bearish flag pattern that is shown in red. In technical analysis, such a pattern is usually a sign of a bearish continuation.
The stock invalidated this bearish flag pattern on Monday when it popped above the upper side of the flag. By so doing, it managed to move above the 25-day and 50-day moving averages. The Stochastic Oscillator also managed to move above the overbought level.
Therefore, there is a likelihood that the stock will maintain its bullish trend as investors focus on the surging oil prices. On the flip side, a drop back to the bearish flag pattern will invalidate the bullish view.