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Daily Oil Prices 23 July 2009

Oil Chart 23 July 2009

Oil Chart 23 July 2009

Yesterday’s weekly DOE figures were interesting in that it was the cut in refining activity which seems to have caught the attention of the oil market.  Although this reduction does not appear to have translated into a build in the stock of crude it does indicate that a lack of demand will add pressure to daily oil prices and to the front of the WTI curve.  During the trading session crude oil prices fell as low as $63.76 per barrel, trading in a $2 range before settling at $65.40 per barrel.   In fact oil prices reacted in much the same way as many other markets yesterday, during Ben Bernanke’s testimony as his comments were first absorbed, and then dissected and analysed for any hidden nuggets as to the future direction for FED fiscal and economic policy based on the current economic picture. As a result, prices in equities, commodities, bonds, currency and treasuries all oscillated during the day as each piece of news was released or a question answered.  From a technical perspective crude oil finished the day with a long legged doji with a deep lower shadow, which suggests that we may see a move higher today in oil prices.  This view is confirmed by the 9 day moving average which is now crossing above the 14 day, but before oil bulls can claim victory we will need see a sustained break and hold above the 40 day moving average on the oil chart, coupled with ‘a breach of the resistance at $67 to $70 level.  However, this cannot be guaranteed as the bearish ‘shooting star’ candle from Tuesday could still hold sway, and if this is validated in due course, we may see a reversal lower in the short term for daily oil prices.  However this candle occurred following a gapped up open, the technical picture is far from clear.

The short and medium term trend is sideways, long term trend bullish.

WTI:

Support:    $63.98 (low of   21/07/09)                               Resistance: $67.15   (high of  03/07/09)

Support:    $63.76  (low of 22/07/09)                               Resistance: $66. 68    ( high of 21/07/09 )

Support:    $63.39   (low of 06/07/09)                              Resistance: $65.76    ( Yesterday’s high )

OIL (BRENT):

Support:    $66.21      (low of 02/07/09 )                             Resistance: $69.19  (high  of  02/07/09)

Support:    $65.69    (low of  21/07/09)                               Resistance: $68. 65 (high of  03/06/09)

Support:    $65.19   (low of  20/07/09)                             Resistance: $67. 92  (high of 21/07/09)