Crude oil may bounce to near $90 a barrel by the end of the second quarter, according to a technical analysis by Auerbach Grayson, a brokerage in New York.
Futures are set to reach $89.84, which corresponds to the 50 per cent Fibonacci retracement of the range generated by the record high of $147.27 on July 11, 2008, and the low of $32.40 touched on December 19, 2008, said an analyst at the brokerage.
“We continue to see higher highs and higher lows, which signals that we’re in an uptrend,” Ross said in a telephone interview. “There’s been a lot of sound and fury recently with $12 moves, higher or lower.”
Prices would have to fall below $72.50 a barrel to invalidate the trend, Ross added. The $72.50 area coincides with a trend line touching lows in May 2009 and $69.51, the close on December 14.
Oil prices fell on Monday, approaching one-month lows, near $74 a barrel, on continued market unease over possible tighter Chinese monetary policy and a US proposal to toughen bank trading rules. Prices have fallen by almost $10 a barrel over the last two weeks since hitting a 15-month peak of $83.95 on January 11.
