Daily Crude Oil Price Chart - WTI Oil Prices 29th June 2009

Whilst a weaker US Dollar may have played a part in any rise in the price of crude during Friday oil trading session, the complex appears to be tracking equity markets which suffered a bout of profit taking both ahead of the weekend and anticipation of this week’s Fourth of July Holiday.  To this mix must now be added the Nigerian supply problems (although this could be offset by additional OPEC production), the problems which have erupted in Central America where Venezuela’s Hugo Chavez is threatening to intervene in Honduras to reinstate his ally, Manuel Zelaya, and let us not forget North Korea’s threat to fire a missile at Hawaii on the 4th July.   In addition this morning has seen the EIA sharply cut its demand figures for oil in the medium term.

During Friday’s crude oil trading session the complex appeared to be toying once again with both the 9 and 14 day moving averages and in the process reached an inter day high of $71.31.  However, the rally proved short lived as profit taking kicked in thereby pushing daily oil prices back into negative territory.  From a technical perspective the only tentative conclusions we can draw from Friday’s trading are firstly that the low of the day was supported by the 9 day moving average while the open of the day found a degree of resistance at the 14 day moving average, so a somewhat mixed picture.   With the 14 day moving average having crossed the 9 day, the sideways consolidation maintains a bearish flavour, geo political factors notwithstanding, and for any decisive move higher we need to see a break and hold above the $71 per barrel level followed by a breakout of the $73 per barrel.  To the downside the issue remains the amount of clear water below the current price level to the 40 day moving average which does present opportunities for a deeper retracement in due course, and the price support now in place at $67.50 will prove pivotal to such a move.

The short term trend is sideways the medium term trend is bullish while the long term trend is bullish.

WTI:

Support:    $68.80 (Friday’s low)                                 Resistance: $72.15 (high of 15/06/09)

Support:    $68.34 (low of 25/06/09)                              Resistance: $71.74 (high of 17/06/09)

Support:    $66.67 (low of 22/06/09)                              Resistance: $71.31 (Friday’s high)

OIL (BRENT):

Support:    $68.50 (Friday’s low)                                 Resistance: $71.96 (high of 19/06/09)

Support:    $68.05 (low of 25/06/09)                              Resistance: $71.12 (high of 17/06/09)

Support:    $67.58 (low of 24/06/09)                              Resistance: $70.81 (Friday’s high)