A New Inflation Wave? Oil Charts Are Flashing a Powerful Signal

Source: Coindoo Original Title: A New Inflation Wave? Oil Charts Are Flashing a Powerful Signal Original Link:

Oil markets are drawing renewed attention as a long-term technical structure suggests the current cycle may be far from over.

According to long-range chart analysis, crude oil appears to be forming a multi-year bullish setup that could point to dramatically higher prices over the coming years.

Key Takeaways

• WTI crude oil is forming a multi-year bullish falling wedge on long-term charts.
• The projected upside target from this pattern reaches as high as $369 per barrel.
• The setup aligns with expectations of a renewed inflationary phase and a prolonged commodities bull market.

The analysis focuses on a falling wedge pattern that has been developing for roughly four and a half years on WTI crude oil’s monthly chart. In classical technical terms, falling wedges that form after major advances often act as continuation patterns rather than reversals. If this structure is indeed only halfway complete, the implied upside projection places oil prices far above recent levels.

A Long-Term Pattern with Big Implications

The chart highlights a “bullish falling wedge,” embedded within a much larger secular commodities bull market. Based on measured-move projections from similar historical setups, the price target tied to this pattern extends as high as $369 per barrel. That would significantly exceed earlier expectations that placed the upper range of the cycle closer to $250-$300.

This outlook is framed within a broader thesis that the commodities bull market, which began after the prior cycle low nearly six years ago, still has substantial room to run. From this perspective, oil is not an isolated case but part of a wider inflation-linked move across raw materials.

Inflation Risks Resurface

A key element of the argument is macroeconomic rather than purely technical. The analysis warns that a second inflationary phase may be approaching, driven by structural forces such as underinvestment in energy supply, geopolitical risk, and long-term monetary dynamics. In such an environment, energy prices tend to act as both a signal and a catalyst, reinforcing inflationary pressures rather than easing them.

The historical context matters as well. Previous major topping formations in oil, including large head-and-shoulders patterns that formed ahead of the COVID-era crash, played out almost textbook-style once confirmed. That experience is cited as evidence that large-scale technical patterns on long-term charts can provide meaningful guidance when aligned with macro trends.

Why Oil Matters Beyond Energy Markets

If oil were to enter a new explosive phase higher, the impact would extend well beyond energy traders. Sustained price increases would feed directly into transportation, manufacturing, and food costs, potentially complicating central bank efforts to stabilize inflation. For investors, such a move would also reinforce the case for continued strength in commodities relative to financial assets.

While a $369 oil price remains a long-term projection rather than a near-term forecast, the underlying message is clear: the current consolidation phase may not represent the end of the cycle, but a pause before the next major leg higher.