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Daily Oil Prices 23 Sep 2010

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WTI Oil Chart 23 Sep 2010

Yesterday’s long legged doji candle on the daily WTI oil chart hinted at a possible pause point and potential reversal for crude oil, but so far in early trading this morning this has failed to materialise with the commodity drifting lower once again to trade at time of writing at $74.13 per barrel, having opened the oil trading session at $74.96 per barrel.  As such the WTI contract continues to trade below all four moving averages once again but continues within the pennant formation and provided the lower level of this is not breached in the $73.50 then this would suggest that the consolidation remains firmly in place with an anticipated breakout in due course.  However, until this pattern is completed and a breakout established daily oil prices on the WTI will remain waterlogged but with a bearish tone in the short term.

Overall the WTI closed yesterday’s session at $$74.96 per barrel following a build in the Cushing crude oil inventories which surprised the market which had been expected a draw of at least 1.5m barrels.  In addition a market report due for release shortly in the US, suggests that refinery production is now at its lowest level for 5 months adding further weight to the market’s view that demand for crude oil is currently falling.

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