Why oil could rise to $70 this year
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The WTI contract (New York Mercantile Exchange: @CL.1)’s ability to surpass its 200-day moving average on Tuesday for the first time since July 2014 is a meaningful sign, according to Amherst Pierpont strategist Robert Sinche.
“We had a double bottom in oil back in February. We’ve had a good rally. It stopped a couple of times around this 200-day moving average. This could be the breakout,” Sinche said on CNBC’s ” Futures Now
“You want to get at least a one-day close above that 200-day moving average. … “A two-day close would give time for the Saudis to have a response,” Sinche said Tuesday. “(A two-day close) really then does become support rather than resistance, and we’re kind of into a new regime here for oil prices.”
And, that “new regime,” along with a recovering global economy, could help drive crude prices securely into the $50 to $70 range this year, he added.
Prices at $70 a barrel would be more than 60 percent higher than Tuesday’s close of $42.17.
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