Schork Oil Outlook: Table is Set for Another Run at $75 Crude

Energy prices were strong on Tuesday… as money returned from the summer holiday in a buying mood. The bulls did not even bother to wait for OPEC’s pending decision and instead used the plunge in the dollar as reason to load up on oil.

Following the ‘07 regression, last week’s DXY index value of $78.366 should have led to crude prices of $74.9263 which the bulls got last week (74.95 electronic, 75 on the Floor) before they lost confidence. Fundamentally, $74+ is overpriced, but it was overpriced in 2007 too and that didn’t hold back the market. If the dollar follows the 4% drop it saw in September 2007 and the bulls jump on the DXY/Crude relationship, crude prices have a wide open window for $77.699 and above before the month is through...The Schork Report – September 1, 2009

P.S. As of last night the DXY dollar contract is down 1.3% since the end of August and NYMEX WTI is up 1.6%.

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Staked by new money returning from holiday and fueled by a falling dollar, along with Goldman’s iteration of its well advertised $85 forecast, WTI for October delivery surged back over $70 for the first time this month.

Last week support inside the 50/62% retracements from 67.32 to 65.63 held.

Today, the bulls broke through a bearish daily channel, thereby forcing us here at The Schork Reportto change our bias.

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Stephen Schork is the Editor of, "The Schork Report"and has more than 17 years experience in physical commodity and derivatives trading, risk systems modeling and structured commodity finance.