The bleak outlook for oil prices continues, as the Japanese candle chart has shown us the bearish pattern of ‘Three Black Crows’. That is three continuous days with lower ranges and each day closing lower than where it opened. The moving averages are also bearish but this market could afford a large bounce today without altering the current down trend.The short and medium term trends are bearish while the long term trend is sideways.
- Support : $65.45 (yes t erday’s low) Resistance: $76.23 (9 day moving average)
- Support : $64.92 (high of 01/12/06) Resistance: $75.04 (high of 15/10/08)
- Support : $63.80 (high of 07/05/07) Resistance: $73.14 (low of 10/10/08)
Summary:
The market continues to post lower lows helped yesterday by the much larger than expected build in the DOE stats. Speculators who buy because they think this price is cheap are the ones who are having to liquidate their positions at the moment, pushing the market down still further. Prices recovered later in the trading session as bullish news arrived via OPEC who are bringing their November meeting forward to next week and the expectation is they will announce production cuts. Although this will obviously lift prices in the short term, you must also remember that they are considering cuts because of the huge fall in demand, and that in general they do not have a good record of sticking to their limits once set.
DOE S t ock Figures (Change in millions of barrels)
Crude +5.611 (+2.2) Gasoline +6.973 (+2.9) Dis t illa t e -0.453 (+0.4)
