Oil, it’s been a huge issue for many, as the price of oil goes, so goes the price at the pump. Consumers got a little reprieve in the last few weeks as black gold’s price dropped closed to $20. In the last few days, West Texas Light Crude (WTI) rebounded, expect to see gas prices reflect the latest swing.
WTI’s recent rally put the commodity back into a trading channel that characterized its price range since the beginning of April. One of two things are likely to happen here:
1 – Oil remains in the channel and heads to the midpoint of the range, about $120. Above, a-buck-twenty, then oil could flirt with $130.
2 – WTI falls below the bottom guardrail and challenges its recent low. A close below $104, and WTI might slip to $95, which might be its 200-day moving average by the time oil gets there.
For the purposes of the pump, consumers want WTI to choose option 2.