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Daily Oil Price Analysis 18 Feb 2010

Crude Oil Chart 18 Feb 2010

An extremely quiet day for crude oil trading yesterday which closed the session as a narrow doji cross perched on the 40 day moving average which failed to follow through on the strong momentum created in Tuesday’s upwards surge.   Whilst the overall picture remains mildly bullish the key to any longer term rally remains the deep resistance between the $76.50 and $81 per barrel, an area which we are now testing.  Should we see a break and hold above the upper level of this congested area then this should provide the necessary platform for a sustained attack at the $83.00 per barrel price handle where the previous rally stalled.  In today’s trading daily oil prices have continued their upwards momentum (despite poor crude oil inventory data), once again finding good support from the 40 day moving average and this upwards move is further confirmed by the 9 day moving average crossing above the 14 day.  With the 200 day moving average providing an excellent longer term barrier to any reversal we should see oil prices continue their upwards path in the next couple of weeks.

Today’s delayed crude oil inventory figures posted a further build of 3.1m barrels against a forecast of 1.8m; the gasoline stockpile rose by 1.7m barrels against a forecast of a rise of 1.5m barrels while distillates fell by 2.9m barrels whereas analysts were forecasting a fall of 1.5m.  Meantime the API data released yesterday reported a 100k barrel drop in crude, a 1.4m barrel increase in gasoline & an additional 1.3m barrels to the distillate stockpile.  Refining capacity was estimated at 79.9%.  The WTI contract closed yesterday’s session at $77.37 having traded between a high of $77.82 and low of $76.53.  Brent closed at $76.10 having traded between a high of $76.48 and low of $75.40.

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