February is the top month for oil
All else being equal, buy oil for the month ahead.
In the past 15 years, oil has only fallen twice in February. The average gain since 2000 is 5% and the average in the past 10 years was 4.1%. It's the best month on the calendar and the start of a bullish seasonal trend that runs until the end of April.
Technically, the pattern in oil is consolidation. Crude has chopped since early December with the midpoint close to the current level of $53.41. The lower end of the range is just below $50 and the high came on the first trading day of the year at $55.24.
Notably, a bullish series of higher lows as been building in the past two months. To confirm the upside, a close above $54 and a break of the range would be a great signal.
The fundamental side comes down to OPEC. So far signs of compliance with quotas are good but it would only take a few cracks to unwind the agreement and send crude down sharply. The other thing to watch is the US dollar. Trump has been talking down the currency and that works to boost oil priced in USD.
