Oil on a 25mth cyclical bull run?

As discussed in 2009 oil price - note January lows 2007/2009. Start of a 'oil' bull market?, the oil price has moved up from $56 and broken through resistance line at $60. We could be at the start of a cyclical bull run that occurred in January 1st 2007. The current new market highs after the lows of 33.22 on January 1st 2009 have mirrored a similar patten within a two year period of January 1st 2007 and January 1st 2009.

Of course there has been murmurs within the market of a global recovery, we all know deep down that a recovery isn't going top happen anytime soon and the current stock market rallies have been on the back of political 'support' which is slowly dissipating out of the market. Support by means of trying to instill confidence which in turn created a type of illusion in the market, causing the market players to overly anticipate an economic recovery.

The question is can oil hold it's own and break out further into high 60's? Which can be answered as a distinct possibility. China has been hording oil as it is a net importer and Japan has been doing the same. Although the US Oil reserves are declining. Not to mention that output on oil could be slowing and demand increasing. Even mild demand could move the oil price higher. Another factor of course is US dollar weakness and geopolitical issues which always effects the oil price. But we are looking at this as a cyclical patten, from a technical chart perspective it is clearly there.

(Please click on graph for larger image.) Note the oil price could peak at $70.00 within the next few weeks or early June 2009

*morbius glass does not give investment advice. Trade at your own risk