Oil Price Chart - WTI Daily Oil Prices Graph 29th May 2009

Yesterday’s surge in crude oil prices saw daily oil prices hit an inter day high of $65.44 before settling at $64.83 giving oil traders an overall gain of $1.95.  All this on a day when the EIA oil stats confirmed a bigger than expected draw in crude inventories which added considerable to the bullish price move whilst the OPEC decision to maintain current quotas appeared to have little impact.  From a technical perspective yesterday’s wide spread up bar added momentum to the bullish move higher breaking above the consolidation area of the last few days and moving strongly through the $65 per barrel price, which was our initial target outlined in yesterday’s oil market commentary.   This move higher is fully supported by all three moving averages on the daily oil chart, a picture which is fully endorsed by the weekly chart with the 40 week moving average providing strong support to a further move upwards.  Indeed there is nothing now in the way in terms of resistance between here and the next target in the medium term which is at $73.40, which would make the price of oil close to that suggested by the OPEC ministers at their meeting in Vienna yesterday where they intimated that a $75 a barrel would not be unacceptable.  The only caveat for today is that after such a strong move in the price of oil we may see many commodity traders closing positions ahead of the weekend and taking their profits off the table, and indeed with a national holiday in Europe on Monday we can expect thinner trading volumes across the markets until Tuesday.

The short, medium and long term are bullish.

WTI:

Support:    $62.77 (yesterday’s low)                              Resistance: $68.61 (high of 31/10/08)

Support:    $62.20 (low of 27/05/09)                              Resistance: $65.57 (high of 10/11/08)

Support:    $60.85 (low of 25/05/09)                              Resistance: $65.44 (yesterday’s high)

OIL (BRENT):

Support:    $61.78 (yesterday’s low)                              Resistance: $66.47 (high of 31/10/08)

Support:    $60.99 (low of 27/05/09)                             Resistance: $66.00 (high of 05/11/08)

Support:    $59.85 (low of 25/05/09)                              Resistance: $64.68 (yesterday’s high)

DOE Stock Figures (change in millions of barrels)

Crude -5.4 (-0.9)      Distillates +0.2 (+1.2)    Gasoline -0.5 (-2.0)