Openheimer Analyst Says Oil to Rise due to Seasonal Factors

After a torrid run from its bottom, crude oil has settled into the tightest range we’ve seen in a year. But according to one highly regarded technician, the commodity is heading into a key inflection point.

“If you look back to 1984, you see that [the summer months] are some of the best times of the year to be invested in oil,” technical analyst Ari Wald said Tuesday on CNBC’s “Futures Now.”

Wald noted that traditionally, the time between July and September tend to be the three best-performing consecutive months for oil in the past 30 years. By his chart work, oil has rallied an average of 1.5 percent in the month of July, 3 percent in August and 2 percent in September.

And while he does see the potential for oil to trade as high as $67 a barrel in the near term, he noted some troubling signs on the chart that tells him the primary trend for oil remains lower. “We have a falling 200-day moving average which indicates that the trend is still down,” said Wald, head of technical analysis at Oppenheimer. “There’s also a very important retracement level for oil going back to last year. And I think that’s going to curb the upside.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza