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Daily Oil Prices Chart - Crude Oil January 19th 2009

Daily Oil Prices Chart - Crude Oil January 19th 2009

We saw a range of nearly 4.5 dollars for daily oil prices on Friday, with the chart showing a gain in crude oil prices of $1.50 but as I mentioned last week, it’s misleading. The rollover rate, or the difference between the March contract and the Feb contract was $2.54 which in effect covers more than the increase from the chart. A quick look to the moving averages indicates that after a period of consolidation they are about to converge. A strong signal for the next direction for the price of crude oil is still difficult to be seen. The short term trend is sideways while the medium and the long term trends are bearish.

Support:    $44.69 (Friday’s low)                                       Resistance: $49.12 (Friday’s high)

Support:    $43.80 (low of 15/01/09)                                    Resistance: $48.36 (high of 11/12/08)

Support:    $42.79 (low of 09/01/09)                                    Resistance: $47.20 (high of 15/01/09)

Summary:

Initially the price of crude oil moved higher on Friday, on the back of a weaker US dollar and strong equities markets, but later in the session as stocks gave up their gains following a nosedive in banking, this in turn triggered a sell off in the energy markets as well. Recently oil prices have received some support from a still unresolved gas dispute between Russia and Ukraine in a cold temperature environment coupled with tensions in the Middle East . If any of these gets solved quickly (there is already news over the weekend of a cease fire between Israel and Hamas) and fears of a deepening recession take over the headlines again, crude oil could again find itself under increased pressure.