WTI Oil Set to Extend Gains After Topping $105, IAF Says
West Texas Intermediate crude may rise above $110 a barrel if prices breach $105, said Kyle Cooper, director of commodities research at IAF Advisors in Houston.
WTI for July delivery rose $1.74, or 1.7 percent, to $104.07 a barrel yesterday on the New York Mercantile Exchange, the highest settlement in a month, after the U.S. Energy Information Administration reported imports dropped to a 17-year low last week and supplies of crude declined. The intraday high of $104.29 exceeded the 61.8 percent Fibonacci retracement level between the 52-week high and low.
“If we can break above $105 decisively, our next target will be the $110-$112 level reached last year,” Cooper said yesterday in a telephone interview. “If crude imports remain this low, then we are probably going to get some pretty decent crude draws again, and that’ll provide the fundamental basis for the market to move up.”
The price reached $105.22 on March 3, the 2014 intraday high, and $104.99 in April. The front-month contract peaked in 2013 at $112.24 a barrel on Aug. 28 as the U.S. and the U.K. advanced plans for strikes against Syria.
“If we don’t break above $105 after one or two tries, prices will move back,” Cooper said. “What would be extremely telling is if we come up to $105 and we’re hanging around that level until next week and then we have another big draw and then we’re still hanging out at $105. That’s bearish from a psychological standpoint.”
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