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Charts Predict: Oil May Whip Back up to $100

Posted by commendatori on February 2, 2009

Oil prices could bounce back toward $100 a barrel as the huge decline over the past twelve months looks set to give back up to half of its fall, Robin Griffiths, technical strategist at Cazenove Capital, told CNBC.

“After a major fall like that you would expect it to retrace a quarter, a third or a half of the previous fall and as that was an enormous fall, quite a decent bounce is likely to come,” he said.

Oil has fallen well over $100 a barrel since the high of above $147 hit in July. If prices were to regain half of their declines, oil could be back up in the $90-$100 range, according to Griffiths’ predictions.

The “downtrend has now come to an end,” he said. “There is in fact a well-established seasonality to the oil price and the lows tend to form around now,” he added.

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