Daily Oil Prices - WTI Oil Price Chart 25th September 2009
A seminal day for crude oil yesterday as we finally saw the long awaited breakout occur, with all the commodity markets suffering a sharp sell off, and in particular for daily oil prices which ended the trading session with a wide spread down bar, which confirmed the bearish engulfing candle of Wednesday. The dramatic fall in oil prices was triggered by fundamental news of weaker than expected US home sales data, coupled with high US oil inventories, which combined to raise concerns about a potential recovery in fuel demand.
The key aspect of yesterday’s oil trading session from a technical perspective was however, the break below the floor of the recent sideways channel, with daily oil prices bursting through this level at the $67 per barrel price handle, and with the breakout now complete we may well see the bearish picture reinforced in the next few days. What is also clear from yesterday’s price action, and that of the last three months, is that daily oil prices found the $75 per barrel a bridge too far, and with the pennant pattern now firmly broken to the downside, this should set the trend for daily oil prices in the short term, with an initial price target in the $62 per barrel price level being the most likely area that a platform for a modest recovery can be established. With all three moving averages now firmly established overhead, and with the sideways consolidation of the last three months now having created a deep area of resistance to any move higher, daily oil prices seem set to fall further as a result of yesterday’s decisive price move and consequent breakout from the trading channel that we have witnessed since early June. Whilst we may well see another attempt to breach this level in due course, in the short term the trend is downwards with the only question being how far daily oil prices will fall before we see a bounce higher once again as we saw back in early July. Overall the WTI oil contract closed the oil trading session at $$65.89 having opened at $68.33 while reaching a high of $68.77 and low of $$65.60. Meanwhile the Brent contract closed its session at $64.82 having opened at $67.56 while reaching a high of $67.98 and low of $64.58. Oil futures contracts were 335k+ & 190k+ respectively.
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The short term outlook for daily oil prices is bearish, the medium term is bearish and the long term is sideways.
Support: 62.35 Resistance: 67.09
Support: 59.34 Resistance: 62.19
Support: 56.09 Resistance: 58.54
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