Daily Oil Price Chart - WTI Daily Oil Prices 2nd June 2009
With markets seeming to feel that the global economy is in the midst of experiencing a V shaped recovery as evidenced by yet further triple digit gains in the Dow Jones the oil market too is benefiting from this optimism and inflows which resulted in the price of crude oil rising for a fifth day in a row, setting a fresh high for the year at $68.68 (last seen on 5th November 2008). Whether the rally of recent days is sustainable is debatable given the excess inventories and weak demand but as crude oil prices continues to correlate negatively with a weakening US dollar analysts are even suggesting that daily oil prices could reach $70 per barrel within a week. This analysis would be given a boost should we see a drop in tomorrow’s EIA inventory figures. In the meantime daily oil prices gained $1.60 yesterday and ended the day at $68.00 per barrel. From a technical perspective yesterday’s candle made it three in a row of wide spread up bars fully supported by all three moving averages as we push on towards our initial target of $70 a barrel, and thereafter the $75 a barrel favoured by OPEC ministers at their meeting last week. Whilst there is no reason to suppose from a technical perspective that this bullish move will not continue for some time, we need to temper our enthusiasm for crude oil prices with a degree of caution, as at some point the market will take a breather. Some oil analysts are now suggesting that the non farm payroll figures on Friday could act as a short term trigger for such a reversal, particularly if the figures are worse than expected, triggering a fall in equities, a consequent strengthening of the US dollar, and as a result a pullback in oil prices. In trading oil it is important to remember that no one factor will necessarily move the oil market but rather a blend of both the fundamental data and technical position on the daily oil chart.
The short term sideways while the medium and long term are bullish.
WTI:
Support: $66.40 (yesterday’s low) Resistance: $70.53 (high of 30/10/08)
Support: $64.74 (low of 29/05/09) Resistance: $69.21 (high of 29/10/08)
Support: $62.77 (low of 28/05/09) Resistance: $68.68 (yesterday’s high)
OIL (BRENT):
Support: $65.49 (yesterday’s low) Resistance: $70.15 (high of 16/10/08)
Support: $63.96 (low of 29/05/09) Resistance: $68.87 (high of 22/10/08)
Support: $61.78 (low of 28/05/09) Resistance: $68.03 (yesterday’s high)
