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Oil Futures Data : 15th March 2009

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The weekly chart for crude oil futures in the COT index, shows little change, with a very low reading once again, suggesting that we are reaching a turning point for the daily oil price.   The trend of the last three months has been for oil prices to move sideways in a relatively narrow trading range of between $35 and $50 per barrel. The longer this trend continues then the more dramatic will be the breakout from this range when it occurs. Today’s decision by OPEC not to cut oil production further, but rather attempt to implement production cuts already agreed,  could add a bullish sentiment to the market this week, and it would not be a surprising to see a break above $50 per barrel as a result.   Whilst the COT index is not a timing tool, it can provide us with a direction, and from the data we have seen in the past  few weeks, with the commercial contract holders not selling into the market, we should therefore expect a move higher in due course.