Oil may rebound to as high as $90 a barrel if prices hold above a support level near $75, according to technical analysis from Iitrader.com.
Oil futures have tumbled 25 percent this quarter on the New York Mercantile Exchange, heading for the biggest three-month drop since 2008. The decline may halt near the one-year intraday low of $74.95 and prices may rise 20 percent from that level to approach $90, said Rich Ilczyszyn, chief market strategist and founder of Iitrader.com in Chicago.
“We haven’t breached the one-year low, and that bodes well with the thesis that you are going to see buyers against that level,” Ilczyszyn said. “The market is way oversold. I would expect there is a bounce over the one-year low.”
Crude for August delivery declined $2.52, or 3.1 percent, to $77.69 a barrel yesterday on the Nymex, the lowest settlement since Oct. 4, the same day the contract touched the intraday low. Prices are down 29 percent from this year’s settlement high of $109.77 on Feb. 24.
A breach of support at the one-year low could send oil prices down another $5 to $10, Ilczyszyn said.
Technical analysts use historical chart patterns and tools such as moving averages to predict price movements.
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