We saw an ‘Inside Day’ yesterday in a range just under 3 dollars, with crude oil prices giving back some of Monday’s strong gains and the chart indicating that the 9 and 14 day moving averages are less likely to cross, thus giving us the bullish signal. In the overnight trading session oil moved higher so although a rally is still on the cards I feel a break above $44.25 is needed to attract fresh short term technical buying. The short, medium and the long term trends are bearish.
Support: $41.25 (yesterday low) Resistance: $45.68 (high of 04/12/08)
Support: $39.74 (low of 08/12/08) Resistance: $44.68 (9 day moving average)
Support: $39.35 (low of 05/12/08)) Resistance: $44.17 (yesterday high)
Summary:
The close correlation between oil and the equity markets seem to remain intact so although US dollar traded sideways yesterday, crude moved lower helped by a decline in the Dow. News about strikes by port workers at France ’s biggest oil terminals were quickly dismissed by the market which could suggest that demand deterioration is a bigger concern. The weekly EIA stats are released later this afternoon and as always we expect them to make an impact on daily oil prices providing good opportunities for oil traders.
DOE Stock estimates (change in millions of barrels)
Crude +0.2 Distillate -1.3 Gasoline -0.1
