Oil may break resistance, rise to $71.55

Crude oil may be headed for $71.55 a barrel after breaking through $56.10 a barrel, according to Barclays Capital.

Should the June crude oil contract push through the high of $56.10 a barrel reached on March 26, futures may climb past the Jan. 6 intraday high of $59.66 to $62 a barrel, Barclays Capital analysts, led by Jordan Kotick, said in a May 4 report.

Oil could jump to $71.55 a barrel as traders attempt to exit the large number of short positions, or bets that prices will fall, creating a so-called short squeeze, the analysts said. This is equal to the upward moves oil has made from a so- called head-and-shoulders bottom pattern starting in December.

“With the outlook for risky and pro-growth assets continuing to improve particularly as US equity markets turn positive for the year, we are growing more constructive on energy markets,” Barclays Capital said.

Crude oil for June delivery was at $53.82 a barrel, down 65 cents. Singapore time on the New York Mercantile Exchange. Yesterday, it rose $1.27 to $54.47, the highest settlement since November 24. Oil is up 21 per cent this year.

Technical analysts use historical chart patterns to predict potential future price movements.