“Craig Johnson, senior technical market strategist at Piper Jaffray, sees crude prices going as high as $75 per barrel in about a year based on a long-term chart of oil. Johnson’s chart shows an inverse head and shoulders has formed, a pattern that is generally thought to predict an uptrend. This, coupled with crude breaking above a diagonal neckline, makes Johnson bullish on oil,” reports CNBC.
Contango does speak to a potentially over-supplied market, but there are diverging views among market participants about where crude goes from here.
While production has declined in the U.S., recently rebounding oil prices are encouraging exploration and production companies to revisit spending plans with some increasing capital expenditures. That has some oil market observers concerned about a rising rig count and the subsequent impact on crude prices.
Related: A Very Bullish Call for Oil ETFs
Some analysts don’t see much near-term upside in store for the energy sector, which has been one of this year’s best-performing groups.
“While Erin Gibbs, equity chief investment officer at S&P Global, isn’t as bearish on oil, she does believe the energy sector in general may not be headed anywhere even in the long term,” according to CNBC.
United States Oil Fund
