A failure to make new highs on the back of a weak close on Monday appeared to have spooked the longs causing a drop of around $6.00, but crude oil prices today are marginally up in early trading . The 40 day moving average was broken convincingly, however good support was found at the 9 and 14 day. On a break of these shorter term moving averages the technical picture will point to a test of the lows of early last week at just above $39.00 and in the volatile market conditions we are experiencing currently, $50 is not really too far away on the upside if the buyers return.
The short term trend is sideways, while the medium and the long term trends are bearish.
WTI ( West Texas Intermediate):
Support: $41.41 (yesterdays low) Resistance: $47.48 (yesterdays high)
Support: $41.19 (9 day moving average) Resistance: $45.08 (high of 22/01/09)
Support: $39.08 (low of 20/01/09) Resistance: $42.90 (40 day moving average)
OIL (BRENT):
Support: $43.55 (yesterdays low) Resistance: $48.40 (yesterdays high)
Support: $42.85 (low of 21/01/09) Resistance: $47.36 (high of 15/12/08)
Support: $41.84 (low of 13/01/09) Resistance: $45.28 (40 day moving average)
Summary:
Profit taking was the order of the day in yesterdays oil trading, resulting in a down move of a shade over six bucks (the largest since 7th Jan). The dollar weakened placing some pressure on daily oil prices, but not too much emphasis can be placed on this as the currency correlation has deteriorated of late. The reaction to the DOE stock figures this afternoon will be key with further builds in crude stocks predicted. If bearish figures are published another discounting of these in the market will add weight to the short term recovery oil is experiencing at the moment for daily oil prices.
DOE Stock Estimates (change in millions bbls)
Crude +3.0 Gasoline +1.6 Distillate -1.1
