The big story that may be developing this week is a story that actually started last week. As the price of West Texas Intermediate Crude rose above resistance at approximately $53.25 per barrel, it moved into an area where there is little resistance all the way up to $90 per barrel. That's a long way to go with little resistance but that's because the fall in the price of oil that occurred in the second half of last year had basically no support on the way down. Everyone seemed to just step aside and let it fall. As a result, there's little resistance points as it moves higher.
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All of this doesn't affect the majors but it'll put stress on the downstream operators and may boost the profits of the upstream operators. Smart investors in the oil patch should take this into consideration with deciding where to put any new funds. Hopefully any upward movement will help stop the hemorrhaging on the part of the upstream exploration and production companies, but unfortunately it may put pressure on the oil refiners.
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