Crude oil prices just keep marching on supported both from strengthening equity markets and a further weakening of the US dollar, particularly against the Euro. The oil market is used to anti Dollar rhetoric from the likes of Iran, Russia and Venezuela but when it comes from Fed Member Lockhart who yesterday stated “”USD role as reserve currency may decline; not made up mind yet to increase Treasury purchases” there really is no hope. Meanwhile the IEA monthly report showed an upward revision to its 2009 global oil demand figures thereby hinting that crude oil prices are likely to be boosted given this shift in the fundamentals. It will be interesting to see how OPEC producers respond to the increase in daily oil prices and whether the agreed production cuts will in fact hold. From a technical perspective yesterday’s oil chart saw crude oil prices climb even higher and at one point achieve an inter day high of $73.23 per barrel. Despite a small hiccup in the rally the price of oil finished 92 cents higher to settle at $72.47. The oil chart is now pointing to the $74.28 minor resistance level, last seen on 17th October 2008 and with the oil market in buoyant mood and moving further away from all three moving averages we should not be surprised to see a retracement at some point in the near future.
The short and medium term trends are bullish and the long term trend is bullish.
WTI:
Support: $71.32 (yesterday’s low) Resistance: $75.85 (high of 21/10/08)
Support: $70.51 (low of 10/06/09) Resistance: $74.28 (high of 17/10/08)
Support: $68.44 (low of 09/06/09) Resistance: $73.23 (yesterday’s high)
OIL (BRENT):
Support: $70.63 (yesterday’s low) Resistance: $75.04 (high of 15/10/08)
Support: $69.92 (low of 10/06/09) Resistance: $73.29 (high of 21/10/08)
Support: $68.24 (low of 09/06/09) Resistance: $72.27 (yesterday’s high)
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