Crude oil futures prices on the New York Mercantile Exchange Tuesday pushed above major psychological resistance at $75.00 a barrel. “It’s 80 before 60” is the mantra heard on the trading floor, referring to the notion that crude oil futures prices will touch $80.00 a barrel before they back off to the $60.00-a-barrel level. The closely followed oil tycoon T. Boone Pickens last Friday said in a television interview that “I think you are going to see $80 before I’m 80.” The 79-year-old Pickens said he turns 80 sometime next year. He has been right in his prognostications more often than not. “You cannot be short oil right now,” he said.
Strong bullish fundamental factors are underpinning the liquid energy markets, as has been the case for several months.
While last week’s Department of Energy stocks report showed a larger-than-expected rise in U.S. gasoline inventories last week, stockpiles are still well below normal for this time of year, which is the peak demand season for gasoline. The path of least resistance in the crude oil market continues to be the northerly path. The first clues that a market top could be in place would be to see the market produce multiple closes back below strong technical support at $72.00 a barrel. Stay tuned!
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