By Dean Rogers
For the past few weeks each bit of positive crude oil news or fundamental data has seemingly been offset by something negative. As a result, November Brent has settled into a rectangle formation with boundaries between $47.0 and $50.3.
The upper boundary of the rectangle is poised to be challenged after Monday’s move up to $49.87. The pullback at the end of the day indicates another oscillation lower might take place first, but for now, odds still favor a break higher. A close over $50.3 would call for at least $51.7.
Conversely, Brent’s move up has already failed once after breaking higher out of a bullish pennant on September 15. Since then the rectangle has formed. Should the rectangle fail, and prices close below $47.0, look for at least $45.3.
This is a brief analysis and outlook for the next day or so. Our weekly Crude Oil Commentary is a much more detailed and thorough energy price forecast. If you are interested, please sign up for a complimentary four week trial.