As we approach the end of the month, our crude oil model remains bullish.
I first highlighted this back in January with a follow up last month. This is a longer term strategy built on monthly data, and winning trades last almost 12 months in duration. The current trade has been going on for 6 months. The run up for the current trade is about 30%. Since 1984 this strategy has yielded 14 trades, and 7 of them have had run -ups in excess of 30% with 6 of these trades running up greater than 40%. While the past is not necessarily a predictor of future behavior, I would interpret the current bullish situation in crude as a continuance of the upward price pressure that we are currently seeing.
Figure 1 is a monthly chart of the cash data for West Texas Intermediate crude oil.
Figure 1. WTI/ monthly