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Daily Oil Update – 12th September

Technically, this market is more bearish than Winnie the Pooh. We saw a lower low for the sixth day in a row and we still have bearish moving averages. As with trends of this nature, speculators will tend to get hurt if they buck the trend thinking that prices are too cheap or too expensive in case of an uptrend. The current chart pattern is not giving any sign that the trend will cease and we are seeing a lot more resistance on the charts at these levels than support.

The short and medium term trends are bearish and the long term remains bullish.

  1. Support: $96.99 (Yesterday’s low) Resistance: $104.06 (downtrend line)
  2. Support: $96.65 (high of 26/11/07) Resistance: $102.87 (9 day moving average)
  3. Support: $95.19 (high of 07/11/07) Resistance: $100.20 (Yesterday’s high)

Summary:

Although we are still seeing bullish headlines the market continues to fall on bearish technicals and the fall in demand. Yesterday’s weakness was assisted by the strong Dollar. Increasing concerns over recession have halted the buying on any weakness which we saw in the first half of this year. While the picture paints a gloomy outlook for prices remember that we are coming into a weekend where Hurricane Ike could do some severe damage and some worried shorts may start a wave of profit-taking that could lift prices for today. As October Brent Crude expires on Monday we are rolling all our Oil contracts and will close early at 19:30 London time today.