Energy
Tuesday, September 5th, 2023 10:35 am EDT
The rally in the price of oil price has pushed crude through a key technical barrier, which could signal that even higher prices are just around the corner. Bank of America technical strategist Paul Ciana said in a note to clients Monday that the price of U.S. benchmark West Texas Intermediate crude made a so-called golden cross in late August. A golden cross is when the 50-day moving average breaks above the 200-day moving average. Some chart analysts think the 200-day moving average needs to be ascending for it to count as a “golden cross.” “On August 24th a golden cross occurred. In the past [WTI front month futures] was higher 45-50 trading days later (Halloween) 67% of the time. We reiterate buy the dips, [WTI]’s next technical resistance is the 4Q22 highs / trendline in the $92-93/brl area and $100/brl is a possibility,” Ciana wrote. The rally may be extending beyond just oil prices. Strategas market strategist Chris Verrone said in a note to clients Tuesday that energy stocks have also been breaking out. “Oil and Energy stocks have been firming in our work all summer, punctuated with a positive trend change in late-August,” Verrone said. The late-summer moves come after Saudi Arabia cut oil production by one million barrels per day in July. The state-owned Saudi Press Agency said Tuesday that the cuts had been extended through the end of the year . One way for investors to gain exposure to the move in oil prices is through exchange-traded funds that buy oil futures contracts, such as the United States Oil Fund (USO) . There are also leveraged funds such as the Ultra Bloomberg Crude Oil ETF (UCO) that are riskier bets but could generate big returns if the oil market rally does continue. — CNBC’s Michael Bloom contributed reporting. This post has been syndicated from a third-party source. View the original article here.
