Oil-Price ready for Blowout

Back in the days, after a well was drilled, an explosive charge was released down the pipe & set off with the anticipation & hope to crack the rock open in order to increase the petroleum flow into the bore hole. These days, acids are mostly used to achieve larger flow rates. Drillers did not have & use blowout-preventers as they do today to control high-pressure reservoirs. Generally, as soon as highly pressured formations are breached, the hydrocarbon fluids (oil & gas) ascend up the well. Once reaching the surface, the hydrocarbons (now in liquid & gas state) hopefully shoot up many hundreds of feet into the air being a classical sign of a successfully discovered & spudded reservoir. However, as soon as the first hydrocarbons break through the surface & a first small blowout of oil & water is noticed, the shooting typically diminishes strongly & fades away for some seconds before the real blowout erupts highly into the air.

The oil-price gusher started to erupt in early November 2010 as the price broke the (blue) triangle-leg at 82. A short breakout to 88 followed, whereafter a classical pullback to the (protracted) triangle occurred. As per definition, the thrust starts directly thereafter – as the price commenced to rise the last 2 days, a thrust to the upside is anticipated (instead of a thrust to the downside). The goal of this thrust is to rise above the resistance that was marked by the previous breakout (88) & to transform it into a new & sustainable support so that a new & sustainable upward-trend can start. (more)