Why Traders See a Crude Spike Coming

If you've looked a chart of crude oil lately, you might have noticed an odd pattern. The price swings have gotten less and less violent, and the range that crude has traded in has been steadily contracting.

(Read More: Oil Slips Under $110 on Weak Chinese Data)

So why does this matter?

Jeff Kilburg of KKM Financials calls this pattern "coiling," which is just what it sounds like: a sign that the chart is storing up energy which it will soon expend. "When future ranges coil like this," Kilburg explains, "they break out in a violent fashion."

And Kilburg expects that crude will eventually enjoy a dramatic move higher – one which will take it into the upper 90's.

Darren Wolfberg, director of energy trading at BNP Paribas, agrees with that bullish take. When it comes to crude's tightening range, "those type of patterns do get resolved one way or another," Wolfberg says.

Getty Images

Heat rises from stacks at the Chevron refinery in Richmond, California.

That leads him to look at the fundamentals catalysts that could drive a big move.

"You've seen industrial demand pick up, and that could be constructive," Wolfberg notes. "And you've got the summer driving season coming up."

All in all, Wolfberg would expect to see crude trade north of $100 by the third quarter of this year.

— By CNBC's Alex Rosenberg

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