
Oil Prices Daily Chart - WTI Oil Price Chart 4th August 2009
The oil market’s ability to either ignore or take fright at its own fundamentals is really quite extraordinary and must not be underestimated given that tomorrow’s crude oil inventory is expected to show a further build. The forecast numbers are for the inventory to increase by 500k barrels, gasoline to decrease by 1.3m barrels and distillates, which include heating oil and diesel to increase by 800k. Last week’s numbers did cause daily oil prices to drop somewhat dramatically only for them to recover in an equally dramatic fashion the next day as oil prices decided to hitch a ride on the back of surging equity markets. The debate is now whether the oil price is in fact sustainable at the current level as investors continue to pin their hopes on a strong recovery. Oil bulls have also been helped by chronic Dollar weakness, in particular against the Euro, when after months of consolidation the Euro (along with the British Pound and Canadian Loonie) finally broke out of their sideways consolidation. Oil bulls were further cheered by China which saw a combination of strong manufacturing data and record pace refining activity. For the markets it really is a case of East is best. From a technical perspective we are now at a pivotal point on the oil chart following the strong surge higher of the last few days and yesterday’s candle ended the oil trading session deeply embedded in the consolidation of June. For further progress in the price of oil we now need to see this level breached with a hold, preferably, above the $72 per barrel level. Should this occur in due course then I fully expect oil prices to continue rising in the short term fully supported by all three moving averages which are now crossing the 40 day to point higher once again. Should this occur we are still on course to hit our initial target of $75 per barrel in the short term. Overall in yesterday’s oil session WTI oil prices traded in a $4.53 range before ending the day at $66.94 per barrel.
The short term is bullish, the medium sideways and long term bullish.
WTI
Support: 62.38 Resistance: 72.43
Support: 62.86 Resistance: 67.89
Support: 61.14 Resistance: 62.58
Brent
Support: 70.24 Resistance: 72.58
Support: 68.33 Resistance: 69.80
Support: 61.10 Resistance: 67.47



