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Daily Oil Prices 22 Sep 2010

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WTI Oil Chart 22 Sep 2010

Daily oil prices for the WTI oil contract are now building towards the creation of a strong pennant pattern on the daily chart which is centring around the $75 per barrel price point, as the complex continues to trade in an increasingly narrow range with all three short term moving averages bunching in this region.  In the last three days we have seen the WTI contract trade initially higher, followed by a move lower yesterday and a subsequent move higher today, and the longer that this trading action continues, then the more dramatic the eventual breakout will be when it duly arrives.  To the upside the key technical areas are firstly at $79.95 per barrel, followed by $82.97 and finally at $87.14 and for any bullish momentum to be achieved we need to see a break and hold all these levels following any initial surge from the present pennant formation.  To the downside $71.11 remains the key area with a strong platform of support now firmly established.  We now need to wait for this breakout to develop which, I believe is likely to come to the upside in due course.

In the meantime the WTI contract closed yesterday at $$74.85 per barrel.