Crude Oil moving higher, eyeing major breakout

Following the capture of Venezuelan President Maduro, the weekend was dominated by speculation that oil prices were destined to collapse. As futures markets prepared to open Sunday night, the internet was awash with forecasts calling for sub-$50 crude.

Yet, crude opened flat and is now pushing higher. The consensus was wrong for one simple reason: Investors were reacting to headlines and hype, not charts and reality.

The reality is that even if the global market gains access to Venezuela’s reserves, rehabilitating the infrastructure to export meaningful volume will take years, not days. Furthermore, Maduro’s arrest is no guarantee that the remaining power structure will immediately bow to U.S. goals. Finally, let’s remember who will likely be tasked with rebuilding that infrastructure: the major oil companies. They have zero incentive to flood the market and drive oil below $50.

In other words, barring a major U.S. recession, the probability of oil breaking $50 is near zero.

Technically, the chart confirms this bullish stance, showing a wedge tightening around the price action. Should oil confirm a breakout here, we could see a massive move higher—potentially as much as 50% upside.