Normally I'd be thinking short 'em on the second test of $88 but at this moment your guess is as good as mine. The futures are up 83 cents at $88.86.
Here's the chart:
click to enlarge
Here's a rather bullish piece from Economic Forecasts and Opinions:
Crude Oil to Bust Through on Supply Concerns
Since the start of the New Year, West Texas Intermediate (WTI) crude oil have been moving with significant bearish sentiment (See Chart) mostly on a lot of profit taking going around in the commodity space, and also on concerns over the high inventory and that supplies would exceed demand. The latest jobs report only further fanned the pessimism.
However, there are two new events that could turn the market around quickly before you can say “what happened?”
Shutdown - Canadian Upgrader
First, there was a fire on Jan. 6 at an oil sands upgrader (that’s where bitumen is converted to synthetic crude oil), which forced Canadian Natural Resources Ltd. to shut production at its 110,000 barrels per day (bpd) Horizon oil sands project.
Canada is the top region where the United States gets its crude oil and petroleum product imports. This 110,000 bpd capacity is almost 6% of the U.S. daily import volume from Canada.
Shutdown - Alaska Pipeline
Then, the Trans Alaska Pipeline, which is owned by BP, ConocoPhilips, Exxon Mobil Corp., Chevron Corp. and Koch Industries Inc., had to shut down on Saturday Jan. 8, after a leak was discovered at Prudhoe Bay. (Talk about how BP just can’t get a break.)
The 800-mile pipeline carries about 15% of U.S. oil production. Oil producers reportedly are in the process of cutting 95% of output, which is normally around 630,000 bpd. So far, there’s no estimate as to how long the shutdown will last.
Worse Than Hurrican Ivan
These two outages could potentially cut the U.S. crude supply by up to 709,000 barrels per day. That’s about 8% of the U.S. crude import, and around 3.6% of U.S. consumption....MORE