We have seen top option Crude Futures rally 13 dollars in the last 17 days… From the 66 dollars a barrel level up to 80 dollars… On the daily charts, this looks too steep to maintain. That being said, however, the current rate of change may be sustainable until we get to some pricing level where demand slows.. Currently we here in Chicago are paying 266 plus a gallon for 87 octane…My guess is that we might spike to the 299 level around Thanksgiving, since that is typically a big driving weekend… At that point, at those levels, I would think that we would be looking at around 90 dollar a barrel oil, with 100 being the fulcrum point of panic for the US consumer..
Psychologically, when people start paying 50 bucks for a fill up, they don’t like it… They also decide not to go spend 30 bucks for a dinner at apple bees, so that gas increase has a negative trickle down through the rest of the economy.
I am confident if the price of a gallon goes back to 3 Bucks a gallon, you will here cries from different political/consumer groups for “price controls” or at the very least “windfall profits tax increase on big oil…
In any event, watch for a pop above the charts where we have resistance at 80 bucks a barrel now… 13 bucks in 17 weeks could just be a warm up of things to come…
Any tasty pullbacks in crude should be examined, I think, as an opportunity to look at getting long…
Good trading