Daily Oil Price Chart - WTI Spot Oil Prices 23rd June 2009
Crude oil prices tumbled yesterday, along with many other commodities and markets, as a profit taking domino effect took hold and daily oil prices lost almost $3, or 4%, to finish at $67.25 per barrel, a price last seen on June 8th. Fundamentalists have cited some bearish Chinese statistics which appear to show an increase to their stockpile rather than an improvement in demand and the World Bank cutting back its forecast for 2009 as reasons for this fall in the price of crude. However, it is a very selective view of the fundamental picture given the problems in Iran, oil disruption in Nigeria as well as the possibility of a new gas conflict between the Ukraine and Russia! From a technical perspective (and apologies for the candle not showing correctly on the above chart) yesterday’s wide spread down bar injected a degree of momentum into the oil market following last week’s sideways consolidation closing the day firmly below both the 9 and 14 day moving averages but well above the 40 day moving average. The extent to which daily oil prices are now likely to fall will depend on a number of factors: first how long the effect of Friday’s volume spike will be maintained, second the strength or otherwise of the US dollar whose fate is now tied to the outcome of the FOMC meeting and finally the degree of risk aversion that this will trigger as a result and its impact on the equity markets. The key levels for support to any deeper move in crude oil prices are seen at $65 per barrel and $62.50 and should any move be accompanied by a break below the 40 day moving average then we may even see a retracement back to the latter. This, however, is unlikely to change the longer term picture which, I believe, still remains bullish despite the short term bearish tone.
The short term trend is bearish, the medium term trend is sideways while the long term trend is bullish.
WTI:
Support: $66.67 (yesterday’s low) Resistance: $71.28 (high of 17/06/09)
Support: $65.92 (low of 04/06/09) Resistance: $70.69 (high of 09/06/09)
Support: $64.96 (low of 03/06/09) Resistance: $70.21 (yesterday’s high)
OIL (BRENT):
Support: $66.12 (yesterday’s low) Resistance: $70.93 (high of 15/06/09)
Support: $65.49 (low of 01/06/09) Resistance: $70.06 (high of 09/06/09)
Support: $64.91 (low of 03/06/09) Resistance: $69.62 (yesterday’s high)
