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Oil Prices Today – 19th February 2009

Oil Prices - WTI Daily Candle Chart 19th February 2009

Oil Prices - WTI Daily Candle Chart 19th February 2009

Initially oil prices strengthened yesterday ahead of US open giving bulls some temporary respite but eventually turned around and finished the day lower losing another 71 cents in a range of $1.70. Probably the most important feature was the fact that oil prices reached new lows at $37.24 and we are now looking at around the $33 level as the next downside target. The chart shows a set of 8 straight sessions all finishing down since the 9th of Feb indicating a bearish pattern overall. It is interesting to note that the high of the day on each of the last four days has bounced off the 9 day moving average, adding weight to the downwards trends of the last few weeks – always a good signal for traders.

The short, medium and long term trends are bearish.

WTI:

Support:    $37.24 (yesterday’s low)                              Resistance: $41.30 (9 day moving average)

Support:    $33.22 (low of 15/01/09)                              Resistance: $40.65 (high of 26/12/08)

Support:    $30.00 (psychological level)                          Resistance: $38.94 (yesterday’s high)

OIL (BRENT):

Support:    $39.35 (yesterday’s low)                               Resistance: $43.92 (9 day moving average)

Support:    $38.58 (low of 30/12/08)                               Resistance: $43.18 (high of 29/12/08)

Support:    $36.20 (low of 24/12/08)                               Resistance: $41.77 (yesterday’s high)

Summary:

A renewed focus on a weak global demand made its way into the headlines recently, affecting the energy complex along with all other markets and threatens with further contractions in crude prices. It seems that the much talked about stimulus package in the US unveiled earlier this week did little to calm spirits involved in an endless debate about its efficiency  as patience is not the strongest point in the current environment. So unless the EIA stats to be released today can bring some surprises, like a sharp decline in crude stocks, the weakness in oil has a fair chance to continue, and we can therefore expect further falls in daily oil prices.

DOE Stock estimates (change in millions of barrels)

Crude +2.7      Distillates -1.0       Gasoline -0.4