Oil Nears Technical Breakout at $87.50

Oil prices are approaching a critical technical level that could send them soaring to new highs. A bullish pattern known as a bull pennant is forming, following an initial rally in July.

The pattern has been developing over the past few weeks, with oil prices forming a falling wedge after retracing around 61.8% of their initial gains. If Brent crude breaks above $87.50, it could confirm a breakout and trigger further price growth.

Based on the pattern's measured move, Brent could extend towards nearly $118. However, a similar pattern is also forming on the relative strength index (RSI), which may signal that oil prices are nearing a shift in momentum.