Where are oil prices heading next week? Crude oil prices recently mounted a short term rally last week were trading near the $80 mark but then later pulled back just as quickly. The inability for Light crude oil futures to hold above $74 suggests that oil prices are still in a consolidative, or corrective phase. Unless Light crude can trade above $74 on a weekly basis, the odds favour a pull back to the pre $70 a barrel range.
The intermediate pattern is still bullish and suggests that by the summer of 2010 oil prices could be trading significantly higher, with the first sign of much higher oil prices to come will be for oil to trade past the $78 a barrel mark for 3 days in a row or close above $84 a barrel mark on a weekly basis. Going into the summer season could we be looking at higher oil prices and depressed world stock markets?
Recent cold winter weather over the weekend and heavy snow in the US may support crude oil prices in trading next week but commodity and currency markets are choppy amid concerns about sovereign debt problems in EU member country Greece, which within two months, perhaps sooner, has to find someone to lend it £30 billion. Eyes will be on the US Dollar Index and other currencies, together with the next steps EU leaders plan for Greece’s financial problems and the wider European Union member states to boot.